g:\funds\#sbi\1996\secdocs\sbimuni.doc
As filed with the Securities and Exchange Commission on
   March 22, 1996< /R>
  Securities Act File No. 33-44639
Investment Company Act File No. 811-6506


                    SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549
                            __________________
                                 FORM N-2
                       REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933         x
              
    
   Pre-Effective Amendment No.
              o Post-Effective Amendment No. 1    
              x
              
                                   and/or
                       REGISTRATION STATEMENT UNDER
             THE INVESTMENT COMPANY ACT OF 1940            x
                                 Amendment   No.       4    
x
                    (Check appropriate box or boxes.)
                            __________________
                            
              Smith Barney Intermediate Municipal Fund, Inc.
            (Exact name of registrant as specified in
            charter)
            
              388 Greenwich Street, New York, New York 10013
                 (Address of principal executive offices)
            Registrant's Telephone Number, Including Area
                              Code (212) 723-9218
                      Christina T. Sydor, Secretary
                    Smith Barney Municipal Fund, Inc.
                           388 Greenwich Street
                         New York, New York 10013
                 (Name and address of agent for
                 service)
                                 Copy to:
                      John E. Baumgardner, Jr., Esq.
                           Sullivan & Cromwell
                             125 Broad Street
                         New York, New York
                         10004
        
      Approximate date of proposed public offering: As
soon as practicable after the effective date of this
Registration Statement.


      If any of the securities being registered on this
Form N-2  are  to   be  offered on a delayed or
continuous  basis
pursuant  to  Rule 415 of the Securities  Act  of  1933,
as
amended (the 1933 Act), other than securities offered
only in  connection with dividend or interest reinvestment
plans, check the following box.              x

     It is proposed that this filing will become
           effective: x    when  declared effective
           pursuant to  section
8(c).



     This Registration Statement relates to the
registration of  an  indeterminate number of shares
solely  for  marketmaking transactions. Pursuant to Rule
429, this Registration
Statement relates to shares previously registered on Form
N2 (Registration No. 33-48166).
       The   Registrant  hereby  amends  this
Registration Statement on such date or dates as may be
necessary to delay its effective date until the Registrant
shall file a further amendment  which specifically states
that this  registration statement  shall thereafter become
effective  in  accordance with Section 8(a) of the
Securities Act of 1933, as amended, or  until  the
Registration Statement shall become effective on  such
date  as  the Commission acting pursuant  to  said Section
8(a) may determine.
       SMITH BARNEY INTERMEDIATE MUNICIPAL FUND, INC.
                   Cross-Reference Sheet
               Parts A and B of Prospectus*
                             
   
Items in Part A and B of Form     Location
N-2 *
1  Outside Front Cover            Outside Front Cover
2.  Inside Front and Outside Back   Inside Front and Outside
Back Cover Page.                    Cover Page
3.  Fee Table and Synopsis          Prospectus Summary; Fee
Table
4.  Financial Highlights            Financial Highlights
5.  Plan of Distribution            Outside Front Cover
6.  Selling Shareholders            Not Applicable
7.  Use of Proceeds                 Use of Proceeds;
Investment
                                  Objective and Management
                                  Policies
8.  General Description of          The Fund; Investment
Registrant                        Objective and Management
                                  Policies; Investment
                                  Restrictions; Net Asset
                                  Value; Description of
                                  Shares
9.  Management                      Management of the Fund;
                                  Custodian, Transfer,
                                  DividendPaying and Plan
                                  Agent
10. Capital Stock, Long-Term Debt   Dividends and
Distributions; and Other Securities Dividend Reinvestment
Plan;
                                  Description of Shares;
                                  Taxation
11. Defaults and Arrears on Senior  Not Applicable
Securities
12. Legal Proceedings               Not Applicable
13. Table of Contents of Statement  Not
Applicable of Additional Information
14. Cover Page                      Not
Applicable
15. Table of Contents               Not
Applicable
16. General Information and         The Fund, Investment
History                           Objective and Management
                                  Policies
17. Investment Objective and        lnvestment Objective
and
Policies                          Management Policies;
                                  Investment Restrictions;
                                  Appendix B
18. Management                      Management of the
Fund;
                                  Custodian, Transfer,
                                  DividendPaying  and Plan
                                  Agent
                                  
19. Control Persons and Principal   Description of Shares
Holders of Securities
20. Investment Advisory and Other   Management of the Fund
Services
21. Brokerage Allocation and Other  Securities Transactions
and Practices                      Turnover
22. Tax Status                      Dividends and
Distributions;
                                  Dividend Reinvestment Plan,
                                  Taxation
23. Financial Statements            Experts

    


*   Pursuant  to  General  Instructions  of  Form  N-2,  all
information required to be set forth in Part B:
    Statement of Additional Information, has been  included
in Part A: The Prospectus.



                            PART C
Information required to be included in Part C is set forth,
under the appropriate item so numbered, in Part C of this
Registration Statement.    
Smith Barney Intermediate Municipal Fund, Inc.

PROSPECTUS                                       MARCH 29,
1996

388 Greenwich Street
New York, New York 10013
(212) 723-9218

 Smith Barney Intermediate Municipal Fund, Inc. (the "Fund")
is a diversified,
no load, closed-end management investment company. The
Fund's investment objec-
tive is to provide common shareholders a high level of
current income exempt
from Federal income taxes consistent with prudent investing.
In normal market
conditions, the Fund will invest only in municipal
securities rated investment
grade and at least two thirds of its total assets in
municipal securities rated
in the category A or better at the time of investment.
Investment grade securi-
ties are securities rated BBB or higher by Standard & Poor's
Corporation or Baa
or higher by Moody's Investors Service, Inc. or have
equivalent ratings by any
other nationally recognized statistical rating organization.
The Fund's policy
is to invest at least 80% of its total assets in municipal
securities with
remaining maturities of less than fifteen years and to
maintain a dollar-
weighted average maturity of the entire portfolio of not
less than three, but
not more than ten years. There can be no assurance that the
Fund will achieve
its investment objective. The Fund may invest an unlimited
portion of its
assets in municipal securities that pay interest that is
subject to the Federal
alternative minimum tax. See "Investment Objective and
Management Policies" and
"Taxation". The shares of closed-end investment companies
have in the past fre-
quently traded at discounts from their net asset values.
Investors should care-
fully assess the risks associated with an investment in the
Fund. See "Invest-
ment Objective and Management Policies--Risk Factors and
Special Considera-
tions."

 This Prospectus sets forth concisely the information about
the Fund that a
prospective investor ought to know before investing and
should be retained for
future reference. Additional information about the Fund has
been filed with the
Securities and Exchange Commission and is available upon
written or oral


(Continued on page 2)

SMITH BARNEY INC.
Distributor

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS
A CRIMINAL OFFENSE.


1
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

PROSPECTUS (CONTINUED)
MARCH 29, 1995

request by calling or writing to the Fund at the telephone
number or address
set forth above or by contacting a Smith Barney Financial
Consultant.

 Smith Barney Inc. ("Smith Barney") intends to make a market
in the Fund's Com-
mon Stock ("Common Stock"), although it is not obligated to
conduct market-mak-
ing activities and any such activities may be discontinued
at any time, without
notice by Smith Barney. The shares of Common Stock that may
be offered from
time to time pursuant to this Prospectus were issued and
sold by the Fund on
February 27, 1992 in an initial public offering at a price
of $10.00 per share.
No assurance can be given as to the liquidity of, or the
trading market for,
the Common Stock as a result of any market-making activities
undertaken by
Smith Barney. The Fund will not receive any proceeds from
the sale of any Com-
mon Stock offered pursuant to this Prospectus. The Fund's
shares of Common
Stock have been approved for listing on the American Stock
Exchange under the
symbol, "SBI."

 All dealers effecting transactions in the registered
securities, whether or
not participating in this distribution, may be required to
deliver a Prospec-
tus.

 Investors are advised to read this Prospectus and to retain
it for future
reference.

2
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

TABLE OF CONTENTS

<TABLE>
<S>
<C>
PROSPECTUS SUMMARY
4
------------------------------------------------------------
-----------------
FUND EXPENSES
10
------------------------------------------------------------
-----------------
FINANCIAL HIGHLIGHTS
11
------------------------------------------------------------
-----------------
THE FUND
12
------------------------------------------------------------
-----------------
THE OFFERING
12
------------------------------------------------------------
-----------------
USE OF PROCEEDS
12
------------------------------------------------------------
-----------------
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
12
------------------------------------------------------------
-----------------
INVESTMENT RESTRICTIONS
28
------------------------------------------------------------
-----------------
SHARE PRICE DATA
31
------------------------------------------------------------
-----------------
MANAGEMENT OF THE FUND
32
------------------------------------------------------------
-----------------
SECURITIES TRANSACTIONS AND TURNOVER
38
------------------------------------------------------------
-----------------
DIVIDENDS AND DISTRIBUTIONS; DIVIDEND REINVESTMENT PLAN
39
------------------------------------------------------------
-----------------
NET ASSET VALUE
42
------------------------------------------------------------
-----------------
TAXATION
43
------------------------------------------------------------
-----------------
DESCRIPTION OF SHARES
48
------------------------------------------------------------
-----------------
CERTAIN PROVISIONS OF THE ARTICLES OF INCORPORATION AND
MARKET DISCOUNT   51
------------------------------------------------------------
-----------------
CUSTODIAN, TRANSFER, AND DIVIDEND-PAYING AGENT, REGISTRAR
AND PLAN AGENT  53
------------------------------------------------------------
-----------------
REPORTS TO SHAREHOLDERS
53
------------------------------------------------------------
-----------------
EXPERTS
53
------------------------------------------------------------
-----------------
ADDITIONAL INFORMATION
54
------------------------------------------------------------
-----------------
APPENDIX A
A-1
------------------------------------------------------------
-----------------
APPENDIX B
B-1
------------------------------------------------------------
-----------------
</TABLE>


3
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

PROSPECTUS SUMMARY

 The following summary is qualified in its entirety by the
more detailed
information appearing in the body of this Prospectus. Cross
references in this
summary are to headings in the body of the Prospectus.

THE FUND Smith Barney Intermediate Municipal Fund, Inc. (the
"Fund") is a
diversified, no-load, closed-end management investment
company. See "The
Fund."

INVESTMENT OBJECTIVEThe Fund seeks a high level of current
income exempt from
Federal income tax consistent with prudent investing. See
"Investment Objec-
tive and Management Policies."

TAX-EXEMPT INCOMEThe Fund is intended to operate in such a
manner that divi-
dends paid by the Fund may be excluded by the Fund's
shareholders from their
gross incomes for Federal income tax purposes. See
"Investment Objective and
Management Policies" and "Taxation."

QUALITY INVESTMENTSThe Fund intends to achieve its objective
primarily by
investing in a diversified portfolio of municipal securities
which the Fund's
investment manager believes does not involve undue risk to
income or princi-
pal. Under normal market conditions, the Fund will invest
only in municipal
securities rated investment grade and at least two thirds of
its total assets
in municipal securities rated in category A or better by
Standard & Poor's
Corporation ("S&P") or by Moody's Investors Service, Inc.
("Moody's") or have
an equivalent rating by any nationally recognized
statistical rating organiza-
tion at the time of investment. Investment grade securities
are securities
rated BBB or higher by S&P or Baa or higher by Moody's or
have equivalent rat-
ings by any nationally recognized statistical rating
organization (or, if not
so rated, which are, in the opinion of the Fund's investment
manager applying
standards established by the Fund's Board of Directors, of
comparable credit
quality to those so rated). Securities rated BBB by S&P or
Baa by Moody's are
considered as medium grade obligations, i.e., they are
neither highly pro-
tected nor poorly secured. Such securities lack outstanding
investment charac-
teristics and in fact may have speculative characteristics
as well. The Fund's
policy is to invest at least 80% of its total assets in
municipal securities
with remaining maturities of less than fifteen years and to
maintain a dollar-
weighted average maturity of the entire portfolio of not
less than three, but
not more than ten years. The Fund may vary from its
investment policies for
temporary defensive purposes. See "Investment Objective and
Management Poli-
cies" and "Appendix A."

THE OFFERINGSmith Barney intends to make a market in the
Common Stock in addi-
tion to the trading of the Common Stock on the AMEX. Smith
Barney,

4
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

PROSPECTUS SUMMARY (CONTINUED)

however, is not obligated to conduct market-making
activities and any such
activities may be discontinued at any time without notice,
at the sole discre-
tion of Smith Barney.

LISTING AMEX.

SYMBOL SBI.

INVESTMENT MANAGER Greenwich Street Advisors, a division of
Smith Barney Mutual
Funds Management Inc. ("SBMFM"), serves as the Fund's
investment manager (the
"Investment Manager"). The Investment Manager provides
investment advisory and
management services to investment companies affiliated with
Smith Barney. Smith
Barney is a wholly owned subsidiary of Smith Barney Holdings
Inc. ("Holdings"),
which is in turn a wholly owned subsidiary of Travelers
Group Inc. ("Travel-
ers"). Subject to the supervision and direction of the
Fund's Board of Direc-
tors, the Investment Manager manages the securities held by
the Fund in accor-
dance with the Fund's stated investment objective and
policies, makes invest-
ment decisions for the Fund, places orders to purchase and
sell securities on
behalf of the Fund and employs professional portfolio
managers. SBMFM acts as
administrator of the Fund and in that capacity provides
certain administrative
services, including overseeing the Fund's non-investment
operations and its
relations with other service providers and providing
executive and other offi-
cers to the Fund. The Fund pays the Investment Manager a fee
("Management Fee")
for services provided to the Fund that is computed daily and
paid monthly at
the annual rate of 0.60% of the value of the Fund's average
daily net assets.
The Fund will bear other expenses and costs in connection
with its operation in
addition to the costs of investment management services. See
"Management of the
Fund-- Investment Manager."

CUSTODIAN PNC Bank, National Association ("PNC Bank") serves
as the Fund's cus-
todian. See "Custodian, Transfer Agent, Dividend-Paying
Agent, Registrar and
Plan Agent."

TRANSFER AGENT, DIVIDEND-PAYING AGENT, REGISTRAR AND PLAN
AGENT First Data
Investor Services Group, Inc. ("First Data") serves as the
Fund's transfer
agent, dividend-paying agent and registrar. See "Custodian,
Transfer Agent,
Dividend-Paying Agent, Registrar and Plan Agent."

DIVIDENDS AND DISTRIBUTIONS Dividends from net investment
income (that is,
income other than net realized capital gains) are paid
monthly and distribu-
tions of net realized capital gains, if any, are paid
annually. All dividends
or


5
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

PROSPECTUS SUMMARY (CONTINUED)

distributions with respect to shares of Common Stock are
reinvested automati-
cally in additional shares through participation in the
Fund's Dividend Rein-
vestment Plan, unless a shareholder elects to receive cash.
When the market
price of the Common Stock is equal to or exceeds net asset
value, participants
in the Fund's Dividend Reinvestment Plan will receive
distributions through
issuance of additional shares of Common Stock valued at net
asset value or, if
the net asset value is less than 95% of the then current
market price of the
Common Stock, then at 95% of the market price. Whenever
market price is less
than net asset value, participants will receive
distributions through pur-
chases of shares on the open market. See "Dividends and
Distributions; Divi-
dend Reinvestment Plan."

RISK FACTORS AND SPECIAL CONSIDERATIONSThe Fund is a
diversified, closed-end
investment company, designed primarily for the long-term
investor and should
not be considered a vehicle for short-term trading. The Fund
may invest an
unlimited portion of its assets in municipal securities that
pay interest that
is subject to the Federal alternative minimum tax. See
"Taxation."

  Shares of closed-end investment companies frequently trade
at a discount
from net asset value. This characteristic of shares of
closed-end funds is a
risk separate and distinct from the risk that the Fund's net
asset value will
decrease. It should be noted, however, that in some cases
shares of closed-end
funds may trade at a premium. The Fund cannot predict
whether its Common Stock
will trade at, above or below net asset value.

  The amount of available information about the financial
condition of munici-
pal securities issuers may be less extensive than that for
corporate issuers
with publicly-traded securities and the market for municipal
securities may be
less liquid than the market for corporate debt obligations.
Liquidity relates
to the ability of the Fund to sell a security in a timely
manner at a price
which reflects the value of that security. Further,
municipal securities in
which the Fund may invest include special obligation bonds,
lease obligations,
participation certificates and variable rate instruments.
The market for such
securities may be less liquid than the market for general
obligation municipal
securities. The relative illiquidity of some of the Fund's
portfolio securi-
ties may adversely affect the ability of the Fund to dispose
of such securi-
ties in a timely manner and at a fair price. The market for
less liquid secu-
rities tends to be more volatile than the market for more
liquid securities
and the market values of relatively illiquid securities may
be more suscepti-
ble to change as a result of adverse publicity and investor
perceptions than
are the market values of more liquid securities. The

6
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

PROSPECTUS SUMMARY (CONTINUED)

relative illiquidity of some securities in the Fund's
portfolio may adversely
affect the ability of the Fund to value such securities
accurately. Although
the issuers of some municipal securities may be obligated to
redeem such secu-
rities at face value, such redemption could result in
capital losses to the
Fund to the extent that such municipal securities were
purchased by the Fund at
a premium to face value.

  Lease obligations (including installment purchase contract
agreements) in
which the Fund may invest may contain "non-appropriation"
clauses which provide
that the municipality has no obligation to make lease or
installment purchase
payments in future years unless money is appropriated for
such purpose on a
yearly basis. A risk exists that the municipality will not,
or will be unable
to, appropriate money in the future in the event of
political changes, changes
in the economic viability of the project, general economic
changes or for other
reasons. Although such lease obligations generally are
secured by a lien on the
leased property, management and/or disposition of the
property in the event of
foreclosure could be costly and time consuming and result in
unsatisfactory
recoupment of the Fund's original investment. For other
considerations
concerning the municipal securities in which the Fund may
invest, see "Invest-
ment Objectives and Management Policies--Risk Factors and
Special
Considerations."

  The Fund may invest in unrated municipal securities
believed, at the time of
investment, by the Investment Manager to have credit
characteristics equivalent
to, and to be of comparable credit quality with, municipal
securities that are
rated investment grade. The Fund may be more dependent upon
the Investment Man-
ager's investment analysis of such unrated municipal
securities than is the
case with respect to rated municipal securities.

  The Fund may also purchase and sell options on municipal
securities and may
engage in interest rate and other hedging transactions, such
as purchasing and
selling financial futures contracts and related options
thereon. The Fund also
may engage in when-issued and delayed delivery transactions.
These investment
practices entail risks. See "Investment Techniques" and
Appendix B.

  The net asset value of the Fund's Common Stock will change
with changes in
the value of its portfolio securities. Because the Fund will
invest primarily
in fixed-income municipal securities, the net asset value of
the Common Stock
of the Fund can be expected to change as general levels of
interest rates fluc-
tuate.


7
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

PROSPECTUS SUMMARY (CONTINUED)

 The Fund may invest more than 25% of its assets in broad
segments of the
municipal securities market, such as revenue obligations of:
hospitals and
other health care facilities, housing agency revenue
obligations, airport
revenue obligations, industrial development obligations or
in issuers located
in the same state. If the Fund so invests more than 25% of
its assets in such
segments, the Fund will be more susceptible to economic,
business, political,
regulatory and other developments generally affecting
issuers of such segments
of the municipal market.

  The Fund is authorized to borrow amounts up to 33 1/3% of
its total assets
(including the amount borrowed), although currently the Fund
anticipates that
it will not borrow. The use of borrowed funds involves the
speculative factor
known as "leverage." While the Fund does not currently
expect to do so, it is
also permitted under its Articles of Incorporation to issue
preferred stock
which would permit it to assume leverage in an amount up to
50% of its total
assets. If any preferred stock were to be issued, it would
have a priority on
the income and assets of the Fund over the Common Stock and
would have certain
other rights with respect to voting and the election of
directors. In certain
circumstances, the net asset value of and dividends payable
on shares of
Common Stock could be adversely affected by such
preferences. The use of
leverage would create an opportunity for increased returns
to holders of the
Common Stock, but, at the same time, would create special
risks. The Fund will
only utilize leverage when there is an expectation that it
will benefit the
Fund or the holders of Common Stock. To the extent the
income or other gain
derived from securities purchased with the proceeds of
borrowings or preferred
stock issuances exceeds the interest or dividends the Fund
would have to pay
thereon, the Fund's net income or other gain would be
greater than if leverage
had not been used. Conversely, if the income or other gain
from the securities
purchased through leverage is not sufficient to cover the
cost of such
leverage, the total return of the Fund would be less than if
leverage had not
been used. If leverage is used, in certain circumstances the
Fund could be
required to liquidate securities it would not otherwise sell
in order to
satisfy dividend or interest obligations. The Fund may also
borrow up to an
additional 5% of its total assets for temporary purposes
without regard to the
foregoing limitations. See "Investment Objective and
Management Policies--
Investment Techniques--Borrowing and Leverage."

  The Fund's Articles of Incorporation provide that all
shares of stock are
designated as common stock until designated otherwise by the
Board of Direc-
tors. The Board of Directors may classify or reclassify any
unissued shares of
capital stock and set or change the preferences or other
rights of such stock.
If a class

8
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

PROSPECTUS SUMMARY (CONTINUED)

of preferred stock were ever to be issued under the
requirements of the 1940
Act, holders of the preferred stock would elect two
directors. Under the 1940
Act, upon failure by the Fund to pay dividends on the
preferred stock in an
amount equal to two years' dividends arrearage, the holders
of the preferred
stock would be entitled to elect a majority of the Board
until such dividends
arrearage had been provided for or paid. In addition, the
terms of the pre-
ferred stock could entitle holders of the preferred stock to
elect a majority
of the Board in certain other circumstances or when
dividends on the preferred
stock are in arrears for a period of less than two years. If
any preferred
stock were outstanding, holders of the Common Stock would
not be entitled to
receive any net income of or other distributions from the
Fund unless all
accrued dividends on the preferred stock had been paid, and
unless appropriate
asset coverage was maintained. See "Description of Shares."

  Certain antitakeover provisions will make a change in the
Fund's business or
management more difficult without the approval of the Fund's
Board of Directors
and may have the effect of depriving shareholders of an
opportunity to sell
their Common Stock at a premium above the prevailing market
price. See "Certain
Provisions of the Articles of Incorporation and Market
Discount--Anti-Takeover
Provisions."

  Under the Internal Revenue Code of 1986, as amended (the
"Code"), the inter-
est on certain "private activity" obligations issued after
August 7, 1986 is
treated as a preference item for the purpose of calculating
alternative minimum
taxable income. In addition, for corporations, alternative
minimum taxable
income is increased by a percentage of the amount by which a
measure of income
that includes interest on tax-exempt obligations exceeds the
amount otherwise
determined to be alternative minimum taxable income. There
exists no specific
limitation on the amount of the Fund's assets which may be
invested in munici-
pal securities that pay interest that is subject to the
Federal alternative
minimum tax. Accordingly, the Fund's dividends which would
otherwise be tax-
exempt may not be completely tax-exempt to an investor who
is subject to the
alternative minimum tax or may cause an investor to be
subject to such tax. As
such, an investment in the Fund may not be appropriate for
investors who are
already subject to the Federal alternative minimum tax or
who would become sub-
ject to the Federal alternative minimum tax as a result of
an investment in the
Fund. In addition, investors should consider the tax
implications of certain
hedging transactions in which the Fund may engage. See
"Taxation."


9
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

FUND EXPENSES

 The following tables are intended to assist investors in
understanding the
various costs and expenses directly or indirectly associated
with investing in
the Fund.

<TABLE>
------------------------------------------------------------
-----------
  <S>
<C>
  ANNUAL EXPENSES
    (as a percentage of net assets attributable to Common
Stock)
    Management Fees
0.60%
    Other Expenses*
0.12%
------------------------------------------------------------
-----------
  TOTAL ANNUAL OPERATING EXPENSES*
0.72%
------------------------------------------------------------
-----------
</TABLE>

* "Other Expenses", as shown above, is based upon amounts of
expenses for the
 fiscal period ended December 31, 1995.

 EXAMPLE

 The following example demonstrates the projected dollar
amount of total
cumulative expenses that would be incurred over various
periods with respect
to a hypothetical investment in the Fund. These amounts are
based upon payment
by the Fund of operating expenses at the levels set forth in
the table above.

 An investor would pay the following expenses on a $1,000
investment, assuming
(1) a 5% annual return and (2) reinvestment of all dividends
and distributions
at net asset value:

<TABLE>
<CAPTION>

     1 YEAR  3 YEARS   5 YEARS   10 YEARS
-----------------------------------------
<S>  <C>     <C>       <C>       <C>
     $7    $23     $40    $89
-----------------------------------------
</TABLE>

 THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF
FUTURE EXPENSES OF
THE FUND AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN
THOSE SHOWN. More-
over, while the example assumes a 5% annual return, the
Fund's performance
will vary and may result in a return greater or less than
5%. In addition,
while the example assumes reinvestment of all dividends and
distributions at
net asset value, participants in the Fund's Dividend
Reinvestment Plan may
receive shares purchased or issued at a price or value
different from net
asset value. See "Dividends and Distributions; Dividend
Reinvestment Plan."

10
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

FINANCIAL HIGHLIGHTS

 The following information for the fiscal years ended
December 31, 1993
through December 31, 1995 and the period ended December 31,
1992, has
been audited by KPMG Peat Marwick LLP, independent auditors,
whose report
thereon appears in the Fund's Annual Report dated December
31, 1995. The infor-
mation set out below should be read in conjunction with the
financial state-
ments and related notes that also appear in the Fund's
Annual Report, which is
incorporated by reference.

FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH
PERIOD:

<TABLE>
<CAPTION>
                                          1995    1994(a)
1993(a)  1992(a)(b)
------------------------------------------------------------
--------------------
<S>                                      <C>      <C>
<C>      <C>
NET ASSET VALUE, BEGINNING OF PERIOD         $9.95   $10.81
$10.36    $10.00
------------------------------------------------------------
--------------------
INCOME (LOSS) FROM OPERATIONS:
 Net investment income                      0.58     0.58
0.59      0.48*
 Net realized and unrealized gain (loss)    0.73    (0.84)
0.46      0.34
------------------------------------------------------------
--------------------
Total Income (Loss) from Operations         1.31    (0.26)
1.05      0.82
------------------------------------------------------------
--------------------
LESS DISTRIBUTIONS FROM:
 Net investment income                     (0.60)   (0.60)
(0.57)    (0.46)
 Overdistribution of net investment
  income                                   (0.02)     --
--        --
 Net realized gains                          --       --
(0.03)      --
------------------------------------------------------------
--------------------
Total Distributions                        (0.60)   (0.60)
(0.60)    (0.46)
------------------------------------------------------------
--------------------
NET ASSET VALUE, END OF PERIOD              $10.66    $9.95
$10.81    $10.36
------------------------------------------------------------
--------------------
TOTAL RETURN                               13.72%   (2.33)%
10.30%     8.44%++
------------------------------------------------------------
--------------------
NET ASSETS, END OF PERIOD (000S)           $88,392  $82,494
$88,966   $83,499
------------------------------------------------------------
--------------------
RATIOS TO AVERAGE NET ASSETS:
 Expenses                                   0.72%    0.72%
0.73%     0.59%+*
 Net investment income                      5.63     5.64
5.56      5.74+
------------------------------------------------------------
--------------------
PORTFOLIO TURNOVER RATE                    12.57%   25.59%
10.46%    23.48%
------------------------------------------------------------
--------------------
MARKET PRICE AT END OF PERIOD               $10.38    $9.50
$11.13    $10.13
------------------------------------------------------------
--------------------
</TABLE>
(a) Based on the weighted average shares outstanding for the
period.
(b) For the period from March 2, 1992 (commencement of
operations) to December
    31, 1992.
 *  The manager waived a portion of its fees for the period
from March 2, 1992
    to December 31, 1992. If such fees were not waived, the
per share decrease
    in net investment income would have been $0.01 and the
ratio of expenses to
    average net assets would have been 0.70%+.
++  Total return is not annualized, as it may not be
representative of the total
    return for the year.
+   Annualized.


11
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

THE FUND

 The Fund is a diversified no-load, closed-end management
investment company
that seeks a high level of current income exempt from
Federal income taxes
consistent with prudent investing. The Fund will attempt to
achieve this
objective primarily by investing in a diversified portfolio
of municipal secu-
rities which the Investment Manager believes does not
involve undue risk to
income or principal. The Fund, which was incorporated under
the laws of the
State of Maryland on December 19, 1991, is registered under
the 1940 Act, and
has its principal office at 388 Greenwich Street, New York,
New York 10013.
The Fund's telephone number is (212) 723-9218.

THE OFFERING


 Smith Barney intends to make a market in the Fund's Common
Stock, although it
is not obligated to conduct market-making activities and any
such activities
may be discontinued at any time without notice at the sole
discretion of Smith
Barney. No assurance can be given as to the liquidity of, or
the trading mar-
ket for, the Common Stock as a result of any market-making
activities under-
taken by Smith Barney. This Prospectus is to be used by
Smith Barney in con-
nection with offers and sales of the Common Stock in market-
making transac-
tions in the over-the-counter market at negotiated prices
related to prevail-
ing market prices at the time of the sale.

USE OF PROCEEDS


 The Fund will not receive any proceeds from the sale of
Common Stock offered
pursuant to this Prospectus. Proceeds received by Smith
Barney as a result of
its market-making in Common Stock will be utilized by Smith
Barney in connec-
tion with its secondary market operations and for general
corporate purposes.

INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES


 Set out below is a description of the investment objective
and principal
investment policies of the Fund. No assurance can be given
that the Fund will
be able to achieve its investment objective, which may be
changed only with
the approval of a majority of the Fund's outstanding voting
securities as
defined in

12
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)

the 1940 Act. Such a majority is defined in the 1940 Act as
the lesser of (i)
more than 50% of the Fund's outstanding Common Stock and of
any outstanding
shares of preferred stock, voting by class, or (ii) 67% of
the Fund's out-
standing Common Stock and of any outstanding shares of
preferred stock, voting
by class, present at a meeting at which the holders of more
than 50% of the
out- standing shares of each such class are present in
person or by proxy. All
other investment policies or practices are considered by the
Fund not to be
fundamental and accordingly may be changed without
shareholder approval.

 GENERAL

  The Fund's investment objective is to provide shareholders
a high level of
current income exempt from Federal income tax consistent
with prudent invest-
ing. Under normal market conditions, the Fund will invest at
least two thirds
of its total assets in municipal securities rated in
category A or better by
S&P or by Moody's or have an equivalent rating by any
nationally recognized
statistical rating organization (or, if not so rated, which
are, in the opin-
ion of the Investment Manager applying standards established
by the Fund's
Board of Directors, of comparable credit quality to those so
rated) at the
time of investment. Under normal market conditions, the Fund
will also invest
only in municipal securities rated investment grade at the
time of investment.
Investment grade securities are securities rated BBB or
higher by S&P or Baa
or higher by Moody's or have equivalent ratings by any
nationally recognized
statistical rating organization (or, if not so rated, which
are, in the opin-
ion of the Investment Manager applying standards established
by the Fund's
Board of Directors, of comparable credit quality to those so
rated). Securi-
ties rated BBB by S&P are regarded by S&P as having an
adequate capacity to
pay interest and repay principal; whereas such securities
normally exhibit
adequate protection parameters, adverse economic conditions
or changing cir-
cumstances are more likely to lead to a weakened capacity to
pay interest and
repay principal for debt in this category than in higher
rated categories.
Securities rated Baa by Moody's are considered by Moody's as
medium grade
obligations; they are neither highly protected nor poorly
secured; interest
payments and principal security appear adequate for the
present but certain
protective elements may be lacking or may be
characteristically unreliable
over any great length of time; they lack outstanding
investment characteris-
tics and in fact have speculative characteristics as well.
The Fund may be
more dependent upon the Investment Manager's investment
analysis of unrated
municipal securities than is the case with respect to rated
municipal securi-
ties. See "Investment Objective and Management Policies--
Risk Factors and Spe-
cial Considerations" and Appendix A. The Fund's policy is to


13
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)

invest at least 80% of its total assets in municipal
securities with remaining
maturities of less than fifteen years and to maintain a
dollar-weighted aver-
age maturity of the entire portfolio of not less than three,
but not more than
ten years. For this purpose, any scheduled principal
prepayments will be
reflected in the calculation of dollar-weighted average
maturity.

  The foregoing policies with respect to credit quality of
portfolio invest-
ments will apply only at the time of the purchase of a
security, and the Fund
will not be required to dispose of securities in the event
that S&P or Moody's
or any other relevant rating organization downgrades its
assessment of the
credit characteristics of a particular issuer or in the
event the Investment
Manager reassesses its view with respect to the credit
quality of the issuer
thereof.

  Municipal securities are obligations issued by or on
behalf of states, ter-
ritories and possessions of the United States and the
District of Columbia and
their political subdivisions, agencies and
instrumentalities, the interest on
which, in the opinion of bond counsel or other counsel to
the issuer of such
securities is, at the time of issuance, not includable in
gross income for
Federal income tax purposes. Under normal market conditions,
at least 80% of
the Fund's total assets will be invested in municipal
securities. The policy
stated in the foregoing sentence is a fundamental policy and
cannot be changed
without shareholder approval. The Fund has not established
any limit on the
percentage of its portfolio that may be invested in
municipal securities sub-
ject to the alternative minimum tax provisions of Federal
tax law, and a sub-
stantial portion of the income produced by the Fund may be
taxable under the
alternative minimum tax. The Fund may not be a suitable
investment for invest-
ors who are already subject to the Federal alternative
minimum tax or who
would become subject to the Federal alternative minimum tax
as a result of an
investment in the Fund.

  The two principal classifications of municipal bonds are
"general obliga-
tion" bonds and "revenue" or "special obligation" bonds,
which include "indus-
trial revenue bonds." General obligation bonds are secured
by the issuer's
pledge of its faith, credit and taxing power for the payment
of principal and
interest, and accordingly the capacity of the issuer of a
general obligation
bond as to the timely payment of interest and the repayment
of principal when
due is affected by the issuer's maintenance of its tax base.
Revenue or spe-
cial obligation bonds are payable only from the revenues
derived from a par-
ticular facility or class of facilities or, in some cases,
from the proceeds
of a special tax or other specific revenue source such as
from the user of the
facility being financed; accordingly, the timely payment of
interest and the
repayment of principal in accordance

14
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)

with the terms of the revenue or special obligation bond is
a function of the
economic viability of such facility or such revenue source.
Although the rat-
ings of S&P or Moody's of the municipal securities in the
Fund's portfolio are
relative and subjective, and are not absolute standards of
quality, such rat-
ings reflect the assessment of S&P or Moody's, as the case
may be, of the
issuer's ability, or the economic viability of the special
revenue source,
with respect to the timely payment of interest and the
repayment of principal
in accordance with the terms of the obligation. See Appendix
A.

  Also included within the general category of municipal
securities are par-
ticipations in lease obligations or installment purchase
contract obligations
(hereinafter collectively called "lease obligations") of
municipal authorities
or entities. Although lease obligations do not constitute
general obligations
of the municipality for which the municipality's taxing
power is pledged, a
lease obligation is ordinarily backed by the municipality's
covenant to budget
for, appropriate and make the payments due under the lease
obligation. Howev-
er, certain lease obligations contain "non-appropriation"
clauses which pro-
vide that the municipality has no obligation to make lease
or installment pur-
chase payments in future years unless money is appropriated
for such purpose
on a yearly basis. In addition to the "non-appropriation"
risk, these securi-
ties represent a relatively new type of financing that has
not yet developed
the depth of marketability associated with more conventional
bonds. Although
"non-appropriation" lease obligations are often secured by
the underlying
property, disposition of the property in the event of
foreclosure might prove
difficult. There is no limitation on the percentage of the
Fund's assets that
may be invested in "non-appropriation" lease obligations and
in unrated "non-
appropriation" lease obligations believed, at the time of
investment, by the
Investment Manager to have credit characteristics equivalent
to, and to be of
comparable quality as, securities that are rated investment
grade. In evaluat-
ing such unrated lease obligations, the Investment Manager
will consider such
factors as it deems appropriate, including (a) whether the
lease can be can-
celled, (b) the ability of the lease obligee to direct the
sale of the under-
lying assets, (c) the general creditworthiness of the lease
obligor, (d) the
likelihood that the municipality will discontinue
appropriating funding for
the leased property in the event such property is no longer
considered essen-
tial by the municipality, (e) the legal recourse of the
lease obligee in the
event of such a failure to appropriate funding and (f) any
limitations which
are imposed on the lease obligor's ability to utilize
substitute property or
services than those covered by the lease obligations. See
"Investment Objec-
tive and Management Policies--Risk Factors and Special
Considerations."


15
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)


  Participation certificates are obligations issued by state
and local govern-
ments or authorities to finance the acquisition of equipment
and facilities.
They may represent participations in a lease, an installment
purchase con-
tract, or a conditional sales contract. Some municipal
leases and participa-
tion certificates may not be readily marketable. See
"Investment Objective and
Management Policies--Risk Factors and Special
Considerations."

  The "issuer" of municipal securities is generally deemed
to be the govern-
mental agency, authority, instrumentality or other political
subdivision, or
the non-governmental user of a revenue bond-financed
facility, the assets and
revenues of which will be used to meet the payment
obligations, or the guaran-
tee of such payment obligations, of the municipal
securities.

  Municipal securities may have fixed or variable interest
rates. The Fund may
purchase floating and variable rate demand notes, which are
municipal securi-
ties normally having a stated maturity in excess of one
year, but which permit
the holder to tender the notes for purchase at the principal
amount thereof.
The interest rate on a floating rate demand note is based on
a known lending
rate, such as a bank's prime rate, and is adjusted each time
such rate is
adjusted. The interest rate on a variable rate demand note
is adjusted at
specified intervals. There generally is no secondary market
for these notes,
although they may be tendered for redemption or remarketing
at face value. See
"Investment Objective and Management Policies--Risk Factors
and Special Con-
siderations." Each such note purchased by the Fund will meet
the criteria
established for the purchase of municipal securities.

 SELECTION OF INVESTMENTS

  The Investment Manager will select securities for the
Fund's portfolio which
the Investment Manager believes entail reasonable credit
risk considered in
relation to the particular investment policies of the Fund.
As a result, the
Fund will not necessarily invest in the highest yielding
municipal securities
permitted by its investment policies if the Investment
Manager determines that
market risks or credit risks associated with such
investments would subject
the Fund's portfolio to excessive risk. The potential for
realization of capi-
tal gains resulting from possible changes in interest rates
will not be a
major consideration. The Fund's policy is to invest at least
80% of its total
assets in municipal securities with remaining maturities of
less than fifteen
years. For this purpose, any scheduled principal prepayments
on municipal
securities will be reflected in the calculation of dollar-
weighted average
maturity. The Investment Manager may adjust the average
maturity of the Fund's
portfolio from time to time, depending on its

16
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)

assessment of the relative yields available on securities of
different maturi-
ties and its expectations of future changes in interest
rates.

  The Fund generally will not invest more than 25% of its
total assets in any
industry, nor will the Fund invest more than 5% of its total
assets in the
securities of any single issue. Governmental issuers of
municipal securities
are not considered part of any "industry". However,
municipal securities backed
only by the assets and revenues of nongovernmental users may
for this purpose
be deemed to be issued by such nongovernmental users, and
the 25% limitation
would apply to the industries of such nongovernmental users.
It is nonetheless
possible that the Fund may invest more than 25% of its total
assets in a
broader segment of the municipal securities market, such as:
hospital and other
health care facilities obligations, housing agency revenue
obligations or air-
port revenue obligations. The Fund will invest more than 25%
of its assets in
such types of municipal securities if the Investment Manager
determines that
the yields available from such obligations in a particular
segment justify the
additional risks associated with a large investment in such
segment. Although
such obligations could be supported by the credit of
governmental users, or by
the credit of nongovernmental users engaged in a number of
industries, econom-
ic, business, political and other developments generally
affecting the revenues
of such users (for example, proposed legislation or pending
court decisions
affecting the financing of such projects and market factors
affecting the
demand for their services or products) may have a general
adverse effect on all
municipal securities in such a market segment. The Fund
reserves the right to
invest more than 25% of its assets in industrial development
bonds or in
issuers located in the same state, although it has no
present intention to
invest more than 25% of its assets in issuers located in the
same state. If the
Fund were to invest more than 25% of its total assets in
issuers located in the
same state, it would be more susceptible to adverse
economic, business, or reg-
ulatory conditions in that state.

  From time to time, the Fund's investments may include
securities as to which
the Fund, by itself or together with other funds or accounts
managed by the
Investment Manager, holds a major portion or all of an issue
of municipal secu-
rities. Because there may be relatively few potential
purchasers for such
investments and, in some cases, there may be contractual
restrictions on
resales, the Fund may find it more difficult to sell such
securities at a time
when the Investment Manager believes it advisable to do so.


17
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)


 TEMPORARY DEFENSIVE STRATEGIES

  At times the Investment Manager may judge that conditions
in the markets for
municipal securities make pursuing the Fund's basic
investment strategy incon-
sistent with the best interests of its shareholders. At such
times the Invest-
ment Manager may use alternate strategies, primarily
designed to reduce fluc-
tuations in the value of the Fund's assets. In implementing
those "defensive"
strategies, the Fund may temporarily invest to a substantial
degree in high
quality, short-term municipal securities. If these high-
quality, short-term
municipal securities are not available or, in the Investment
Manager's judg-
ment, do not afford sufficient protection against adverse
market conditions,
the Fund may invest in the following taxable securities:
obligations of the
U.S. Government, its agencies or instrumentalities; other
debt securities
rated within the four highest grades by S&P or Moody's or
any nationally rec-
ognized statistical rating organization; commercial paper
rated in the highest
grade by any such rating service; certificates of deposit,
time deposits and
bankers' acceptances; or repurchase agreements with respect
to any of the
foregoing investments or any other fixed-income securities
that the Investment
Manager considers consistent with such strategy. To the
extent the Fund
invests in taxable securities, the Fund will not at such
times be in a posi-
tion to achieve its investment objective of income exempt
from Federal income
taxes.

 INVESTMENT TECHNIQUES

  The Fund may employ, among others, the investment
techniques described
below, which may give rise to taxable income:

  In connection with the investment objective and policies
described above,
the Fund may: engage in interest rate and other hedging and
risk management
transactions; purchase and sell options on municipal
securities and on indices
based on municipal securities and purchase and sell
municipal securities on a
"when-issued" or "delayed delivery" basis. These investment
practices entail
risks. The Investment Manager may use some or all of the
following hedging and
risk management practices when their use appears
appropriate. Although the
Investment Manager believes that these investment practices
may further the
Fund's investment objective, no assurance can be given that
these investment
practices will achieve this result. The Investment Manager
may also decide not
to engage in any of these investment practices.

  Securities Options Transactions. The Fund may invest in
options on municipal
securities. Such options are traded over-the-counter,
although if options on

18
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)

municipal securities were to be listed for trading on a
national securities
exchange, the Fund may trade in exchange-listed options. In
general, the Fund
may purchase and sell (write) options on up to 20% of its
assets. The Securi-
ties and Exchange Commission (the "SEC") requires that
obligations of invest-
ment companies such as the Fund, in connection with options
sold, must comply
with certain segregation or cover requirements which are
more fully described
in Appendix B. There is no limitation on the amount of the
Fund's assets which
can be used to comply with such segregation or cover
requirements.

  A call option gives the purchaser the right to buy, and
the writer the obli-
gation to sell, the underlying security at the agreed-upon
exercise (or
"strike") price during the option period. A put option gives
the purchaser the
right to sell, and the writer the obligation to buy, the
underlying security at
the strike price during the option period. Purchasers of
options pay an amount,
known as a premium, to the option writer in exchange for the
right under the
option contract. Option contracts may be written with terms
which would permit
the holder of the option to purchase or sell the underlying
security only upon
the expiration date of the option.

  The Fund may purchase put and call options in hedging
transactions to protect
against a decline in the market value of municipal
securities in the Fund's
portfolio (e.g., by the purchase of a put option) and to
protect against an
increase in the cost of fixed income securities that the
Fund may seek to pur-
chase in the future (e.g., by the purchase of a call
option). In the event the
Fund purchases put and call options, paying premiums
therefor, and price move-
ments in the underlying securities are such that exercise of
the options would
not be profitable for the Fund, to the extent such
underlying securities corre-
late in value to the Fund's portfolio securities, losses of
the premiums paid
may be offset by an increase in the value of the Fund's
portfolio securities
(in the case of a purchase of put options) or by a decrease
in the cost of
acquisition of securities by the Fund (in the case of a
purchase of call
options).

  The Fund may also sell put and call options as a means of
increasing the
yield on the Fund's portfolio and also as a means of
providing limited protec-
tion against decreases in market value of the Fund's
portfolio. When the Fund
sells an option, if the underlying securities do not
increase (in the case of a
call option) or decrease (in the case of a put option) to a
price level that
would make the exercise of the option profitable to the
holder of the option,
the option generally will expire without being exercised and
the Fund will
realize as profit the premium received for such option. When
a call option
written by the


19
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)

Fund is exercised, the option holder purchases the
underlying security at the
strike price and the Fund does not participate in any
increase in the price of
such securities above the strike price. When a put option
written by the Fund
is exercised, the Fund will be required to purchase the
underlying securities
at the strike price, which may be in excess of the market
value of such secu-
rities.

  OTC Options. Over-the-counter options ("OTC options")
differ from exchange-
traded options in several respects. They are transacted
directly with dealers
and not with a clearing corporation, and there is a risk of
non-performance by
the dealer. OTC options are available for a greater variety
of securities and
for a wider range of expiration dates and exercise prices
than are exchange-
traded options. Because OTC options are not traded on an
exchange, pricing is
normally done by reference to information from a market
maker, which informa-
tion is carefully monitored by the Investment Manager and
verified in appro-
priate cases. The Fund may be required to treat certain of
its OTC options
transactions as illiquid securities. See Appendix B.

  It will generally be the Fund's policy, in order to avoid
the exercise of an
option sold by it, to cancel its obligation under the option
by entering into
a closing purchase transaction, if available, unless it is
determined to be in
the Fund's interest to sell (in the case of a call option)
or to purchase (in
the case of a put option) the underlying securities. A
closing purchase trans-
action consists of the Fund purchasing an option having the
same terms as the
option sold by the Fund and has the effect of cancelling the
Fund's position
as a seller. The premium which the Fund will pay in
executing a closing pur-
chase transaction may be higher than the premium received
when the option was
sold, depending in large part upon the relative price of the
underlying secu-
rity at the time of each transaction. To the extent options
sold by the Fund
are exercised and the Fund either delivers portfolio
securities to the holder
of a call option or liquidates securities in its portfolio
as a source of
funds to purchase securities put to the Fund, the Fund's
portfolio turnover
rate will increase, which would cause the Fund to incur
additional brokerage
expenses.

  During the option period, the Fund, as a covered call
writer, gives up the
potential appreciation above the exercise price should the
underlying security
rise in value, and the Fund, as a secured put writer,
retains the risk of loss
should the underlying security decline in value. For the
covered call writer,
substantial appreciation in the value of the underlying
security would result
in the security being "called away" at the strike price of
the option which
may be substantially below the fair market value of such
security. For the
secured put writer, substantial depreciation in the value of
the underlying
security would result

20
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)

in the security being "put to" the writer at the strike
price of the option
which may be substantially in excess of the fair market
value of such security.
If a covered call option or a secured put option expires
unexercised, the
writer realizes a gain, and the buyer a loss, in the amount
of the premium.

  To the extent that an active market exists or develops,
whether on a national
securities exchange or over-the-counter, in options on
indices based upon
municipal securities, the Fund may purchase and sell options
on such indices,
subject to the limitation that the Fund may purchase and
sell options on up to
20% of its assets. Through the writing or purchase of index
options the Fund
can achieve many of the same objectives as through the use
of options on indi-
vidual securities. Options on securities indices are similar
to options on
securities except that, rather than the right to take or
make delivery of a
security at a specified price, an option on a securities
index gives the holder
the right to receive, upon exercise of the option, an amount
of cash if the
closing level of the securities index upon which the option
is based is greater
than, in the case of a call, or less than, in the case of a
put, the strike
price of the option.

  Price movements in securities which the Fund owns or
intends to purchase will
not correlate perfectly with movements in the level of an
index and, therefore,
the Fund bears the risk of a loss on an index option which
is not completely
offset by movements in the price of such securities. Because
index options are
settled in cash, a call writer cannot determine the amount
of its settlement
obligations in advance and, unlike call writing on specific
securities, cannot
provide in advance for, or cover, its potential settlement
obligations by
acquiring and holding the underlying securities.

  Income earned or deemed to be earned, if any, by the Fund
from transactions
in securities options will be taxable income of the Fund.
Under a revenue rul-
ing issued by the Internal Revenue Service, the Fund is
required to allocate
net capital gains and other taxable income, if any, among
Common Stock and any
outstanding shares of preferred stock on a pro rata basis
for the year in which
such net capital gains or other taxable income are realized.
See "Taxation" and
"Dividends and Distributions; Dividend Reinvestment Plan."
For a further dis-
cussion of certain characteristics of options and risks
associated with options
transactions, see Appendix B.

  Borrowing and Leverage. The Fund is authorized to borrow
amounts up to 33
1/3% of its total assets (including the amount borrowed),
although currently
the Fund anticipates that it will not borrow. The use of
borrowed funds
involves the speculative factor known as "leverage." While
the Fund does not


21
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)

currently expect to do so, it is also permitted under its
Articles of Incorpo-
ration to issue preferred stock which would permit it to
assume leverage in an
amount up to 50% of its total assets. If any preferred stock
were to be
issued, it would have a priority on the income and assets of
the Fund over the
Common Stock and would have certain other rights with
respect to voting and
the election of directors. In certain circumstances, the net
asset value of
and dividends payable on shares of Common Stock could be
adversely affected by
such preferences. The use of leverage would create an
opportunity for
increased returns to holders of the Common Stock, but, at
the same time, would
create special risks. The Fund will only utilize leverage
when there is an
expectation that it will benefit the Fund or the holders of
Common Stock. To
the extent the income or other gain derived from securities
purchased with the
proceeds of borrowings or preferred stock issuances exceeds
the interest or
dividends the Fund would have to pay thereon, the Fund's net
income or other
gain would be greater than if leverage had not been used.
Conversely, if the
income or other gain from the securities purchased through
leverage is not
sufficient to cover the cost of such leverage, the total
return of the Fund
would be less than if leverage had not been used. If
leverage is used, in cer-
tain circumstances the Fund could be required to liquidate
securities it would
not otherwise sell in order to satisfy dividend or interest
obligations. The
Fund may also borrow up to an additional 5% of its total
assets for temporary
purposes without regard to the foregoing limitations. See
"Investment Objec-
tive and Management Policies" and "Description of Shares."

  Interest Rate and Other Hedging Transactions. In order to
seek to protect
the value of its portfolio securities against declines
resulting from changes
in interest rates or other market changes, the Fund may
enter into the follow-
ing hedging transactions: financial futures contracts and
related options con-
tracts.

  The Fund may enter into various interest rate hedging
transactions using
financial instruments with a high degree of correlation to
the municipal secu-
rities which the Fund may purchase for its portfolio,
including interest rate
futures contracts (e.g., futures contracts on U.S. Treasury
securities) and
futures contracts on interest rate related indices (e.g.,
municipal bond indi-
ces). The Fund may also purchase and write put and call
options on such
futures contracts and on the underlying instruments. The
Fund may enter into
these transactions in an attempt to "lock in" a return or
spread on a particu-
lar investment or portion of its portfolio, to protect
against any increase in
the price of securities the Fund anticipates purchasing at a
later date, or
for other risk management strategies such as managing the
effective dollar-
weighted average duration

22
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)

of the Fund's portfolio. Financial futures and options
contracts and the risks
attendant to the Fund's use thereof, are more completely
described in Appendix
B. The successful utilization of hedging and risk management
transactions
requires skills different from those needed in the selection
of the Fund's
portfolio securities. The Fund believes that the Investment
Manager possesses
the skills necessary for the successful utilization of
hedging and risk manage-
ment transactions.

  The Fund will not engage in the foregoing transactions for
speculative pur-
poses, but only in limited circumstances as a means to hedge
risks associated
with management of the Fund's portfolio. Typically,
investments in futures con-
tracts and sales of futures options contracts require the
Fund to deposit in a
custodial account a good faith deposit, known as "initial
margin," in connec-
tion with its obligations in an amount of cash or specified
debt securities
which generally is equal to 1%-15% of the face amount of the
contract, which
initial margin requirement may be revised periodically by
the applicable
exchange as the volatility of the contract fluctuates.
Thereafter, the Fund
must make additional deposits with the applicable financial
intermediary equal
to any net losses due to unfavorable price movements of the
contract, and will
be credited with an amount equal to any net gains due to
favorable price move-
ments. These additional deposits or credits are calculated
and required daily
and are known as "variation margin."

  The SEC generally requires that when investment companies,
such as the Fund,
effect transactions of the foregoing nature, such funds must
either segregate
cash or high quality, readily marketable portfolio
securities with its custo-
dian or financial intermediary in the amount of its
obligations under the fore-
going transactions, or cover such obligations by maintaining
positions in port-
folio securities, futures contracts or options that would
serve to satisfy or
offset the risk of such obligations. When effecting
transactions of the forego-
ing nature, the Fund will comply with such segregation or
cover requirements.
There is no limitation on the percentage of the Fund's
assets which may be seg-
regated with respect to such transactions.

  The Fund will not enter into a futures contract or related
option if, immedi-
ately after such investment, the sum of the amount of its
initial margin depos-
its and premiums on open contracts and options would exceed
5% of the fair mar-
ket value of the Fund's total assets after taking into
account unrealized prof-
its and unrealized losses on any such contracts. The Fund
may, however, invest
more than such amount in the future if it obtains authority
to do so from the
appropriate regulatory agencies without requiring the Fund
to register as a com-


23
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)

modity pool operator or adversely affecting its status as an
investment com-
pany for Federal securities law or income tax purposes.

  All of the foregoing transactions present certain risks.
In particular, the
variable degree of correlation between price movements of
futures contracts
and price movements in the securities being hedged creates
the possibility
that losses on the hedge may be greater than gains in the
value of the Fund's
securities. In addition, these instruments may not be liquid
in all circum-
stances and generally are closed out by entering into
offsetting transactions
rather than by delivery or cash settlement at maturity. As a
result, in vola-
tile markets, the Fund may not be able to close out a
transaction on favorable
terms or at all. Although the contemplated use of those
contracts should tend
to reduce the risk of loss due to a decline in the value of
the hedged securi-
ty, at the same time the use of these contracts could tend
to limit any poten-
tial gain which might result from an increase in the value
of such security.
Finally, the daily deposit requirements for futures
contracts and sales of
futures options contracts create an ongoing greater
potential financial risk
than do option purchase transactions, where the exposure is
limited to the
cost of the premium for the option.

  Successful use of futures contracts and options thereon by
the Fund is sub-
ject to the ability of the Investment Manager to predict
correctly movements
in the direction of interest rates and other factors
affecting markets securi-
ties. If the Investment Manager's expectations are not met,
the Fund would be
in a worse position than if a hedging strategy had not been
pursued. For exam-
ple, if the Fund has hedged against the possibility of an
increase in interest
rates which would adversely affect the price of securities
in its portfolio
and the price of such securities increases instead, the Fund
will lose part or
all of the benefit of the increased value of its securities
because it will
have offsetting losses in its futures positions. In
addition, in such situa-
tions, if the Fund has insufficient cash to meet daily
variation margin
requirements, it may have to sell securities to meet such
requirements. Such
sales of securities may be, but will not necessarily be, at
increased prices
which reflect the rising market. The Fund may have to sell
securities at a
time when it is disadvantageous to do so.

  In addition to engaging in transactions utilizing options
on futures con-
tracts, the Fund may purchase put and call options on
securities and, as
developed from time to time, on interest indices and other
instruments. Pur-
chasing options may increase investment flexibility and
improve total return,
but also risks loss of the option premium if an asset the
Fund has the option
to buy declines in value or if an asset the Fund has the
option to sell
increases in value.

24
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)


  New options and future contracts and other financial
products and various
combinations thereof, continue to be developed and the Fund
may invest in any
such options, contracts and products as may be developed to
the extent consis-
tent with its investment objective and the regulatory
requirements applicable
to investment companies.

  Income earned or deemed to be earned, if any, by the Fund
from its hedging
activities, will be taxable income of the Fund. See
"Taxation" and "Dividends
and Distributions; Dividend Reinvestment Plan."

  When-Issued and Delayed Delivery Transactions. The Fund
may also purchase
municipal securities on a "when-issued" and "delayed
delivery" basis. No income
accrues to the Fund on municipal securities in connection
with such transac-
tions prior to the date the Fund actually takes delivery of
such securities.
These transactions are subject to market fluctuation; the
value of the munici-
pal securities at delivery may be more or less than their
purchase price, and
yields generally available on municipal securities when
delivery occurs may be
higher than yields on the municipal securities obtained
pursuant to such trans-
actions. Because the Fund relies on the buyer or seller, as
the case may be, to
consummate the transaction, failure by the other party to
complete the transac-
tion may result in the Fund missing the opportunity of
obtaining a price or
yield considered to be advantageous. When the Fund is the
buyer in such a
transaction, however, it will maintain, in a segregated
account with its custo-
dian, cash or high-grade municipal portfolio securities
having an aggregate
value equal to the amount of such purchase commitments until
payment is made.
The Fund will make commitments to purchase municipal
securities on such basis
only with the intention of actually acquiring these
securities, but the Fund
may sell such securities prior to the settlement date if
such sale is consid-
ered to be advisable.

  To the extent that the Fund engages in "when-issued" and
"delayed delivery"
transactions, it will do so for the purpose of acquiring
securities for the
Fund's portfolio consistent with the Fund's investment
objective and policies
and not for the purpose of investment leverage. No specified
limitation exists
as to the percentage of the Fund's assets which may be used
to acquire securi-
ties on a "when-issued" or "delayed delivery" basis.


25
<PAGE>

Smith Barney Inermediate Municipal Fund, Inc.

INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)


 RISK FACTORS AND SPECIAL CONSIDERATIONS

  Investment in the Fund involves risk factors and special
considerations,
such as those described below:

  The Fund is a closed-end investment company. Shares of
closed-end investment
companies frequently trade at a discount from net asset
value, but in some
cases trade at a premium. The Fund cannot predict whether
its Common Stock
will trade at, above or below net asset value.

  In normal market conditions, substantially all of the
Fund's total assets
will be invested in municipal securities rated investment
grade at the time of
investment. The Fund may invest in unrated municipal
securities believed, at
the time of investment, by the Investment Manager to have
credit characteris-
tics equivalent to, and to be of comparable quality as,
municipal securities
that are rated investment grade. The amount of available
information about the
financial condition of municipal securities issuers may be
less extensive than
that for corporate issuers with publicly traded securities,
and the market for
municipal securities may be less liquid than the market for
corporate debt
obligations. Liquidity relates to the ability of the Fund to
sell a security
in a timely manner at a price which reflects the value of
that security. The
market for unrated municipal securities is considered
generally to be less
liquid than the market for rated municipal securities.
Further, municipal
securities in which the Fund may invest include special
obligation bonds,
lease obligations, participation certificates and variable
rate instruments.
The market for such securities may be less liquid than the
market for general
obligation municipal securities. The relative illiquidity of
some of the
Fund's portfolio securities may adversely affect the ability
of the Fund to
dispose of such securities in a timely manner and at a fair
price. The market
for less liquid securities tends to be more volatile than
the market for more
liquid securities and market values of relatively illiquid
securities may be
more susceptible to change as a result of adverse publicity
and investor per-
ceptions than are the market values of more liquid
securities. Although the
issuer of some municipal securities may be obligated to
redeem such securities
at face value, such redemption could result in capital
losses to the Fund to
the extent that such municipal securities were purchased by
the Fund at a pre-
mium to face value.

  Although the municipal securities in which the Fund may
invest will be, at
the time of investment, rated investment grade or believed
by the Investment
Manager to be of comparable quality, municipal securities,
like other debt
obligations, are subject to the risk of non-payment. Such
non-payment would
result

26
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)

in a reduction of income to the Fund, and could result in a
reduction in the
value of the municipal security experiencing non-payment and
a potential
decrease in the net asset value of the Fund. Issuers of
municipal securities
might seek protection under the bankruptcy laws. In the
event of bankruptcy of
such an issuer, the Fund could experience delays and
limitations with respect
to the collection of principal and interest on such
municipal securities, and
the Fund may not, in all circumstances, be able to collect
all principal and
interest to which it is entitled. To enforce its rights in
the event of a
default in the payment of interest or repayment of principal
or both, the Fund
may take possession of and manage the assets securing the
issuer's obligations
on such securities, which may increase the Fund's operating
expenses and
adversely affect the net asset value of the Fund. Any income
derived from the
Fund's ownership or operation of such assets may not be tax-
exempt. In addi-
tion, the Fund's intention to qualify as a "regulated
investment company"
under the Code, may limit the extent to which the Fund may
exercise its rights
by taking possession of such assets, because as a regulated
investment company
the Fund is subject to certain limitations on its
investments and on the
nature of its income. See "Taxation."

  Lease obligations in which the Fund may invest may contain
"non-
appropriation" clauses which provide that the municipality
has no obligation
to make lease or installment purchase payments in future
years unless money is
appropriated for such purpose on a yearly basis. A risk
exists that the munic-
ipality will not, or will be unable to, appropriate money in
the future in the
event of political changes, changes in the economic
viability of the project,
general economic changes or for other reasons. Although such
lease obligations
generally are secured by a lien on the leased property,
disposition of the
property in the event of foreclosure could be costly, time
consuming and
result in unsatisfactory recoupment of the Fund's original
investment.

  The Investment Manager values the Fund's investment on the
basis of bid
prices provided by a pricing service when the Fund believes
such prices
reflect fair market value. To the extent that there is no
established retail
market for some of the securities in which the Fund may
invest, there may be
relatively inactive trading in such securities and the
ability of a pricing
service or the Investment Manager to accurately value such
securities may be
adversely affected. During periods of reduced market
liquidity and in the
absence of readily available market quotations for municipal
securities held
in the Fund's portfolio, the responsibility of the
Investment Manager to value
the Fund's securities becomes more difficult and the
Investment Manager's
judgment may play a greater role


27
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)

in the valuation of the Fund's securities due to the reduced
availability of
reliable objective data. To the extent that the Fund invests
in illiquid secu-
rities and securities which are restricted as to resale, the
Fund may incur
additional risks and costs. Illiquid and restricted
securities are particu-
larly difficult to dispose of.

  The net asset value of the Fund's Common Stock will change
with changes in
the value of its portfolio securities. Because the Fund will
invest primarily
in fixed-income municipal securities, the net asset value of
the Common Stock
of the Fund can be expected to change as general levels of
interest rates
fluctuate. All of the foregoing risks affecting net asset
value will be magni-
fied if the Fund issues preferred stock or borrows money.
Volatility may be
greater during periods of general economic uncertainty.

  The Fund has not established any limit on the percentage
of its portfolio
that may be invested in municipal securities subject to the
alternative mini-
mum tax provision of Federal tax law, and a substantial
portion of the income
produced by the Fund may be taxable under the alternative
minimum tax. The
Fund may not be a suitable investment for investors who are
already subject to
the Federal alternative minimum tax or who would become
subject to the Federal
alternative minimum tax as a result of an investment in the
Fund. In addition,
income earned or deemed to be earned with respect to the
Fund's hedging trans-
actions, if any, will be taxable. See "Taxation."

INVESTMENT RESTRICTIONS


  The following investment restrictions of the Fund are
fundamental and cannot
be changed without the approval of the holders of a majority
of the Fund's
outstanding voting securities as defined in the 1940 Act. If
a percentage
restriction on investment or use of assets set forth below
is adhered to at
the time a transaction is effected, later changes in
percentage resulting from
changing market values will not be considered a deviation
from policy. The
Fund may not:

  1. With respect to 75% of its total assets, purchase any
securities (other
  than obligations issued or guaranteed by the United States
Government or
  by its agencies or instrumentalities), if as a result more
than 5% of the
  Fund's total assets would then be invested in securities
of a single
  issuer or if as a result the Fund would hold more than 10%
of the out-
  standing voting securities of any single issuer.

28
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

INVESTMENT RESTRICTIONS (CONTINUED)


  2. Invest more than 25% of its total assets in a single
industry; however,
  as described above under "Investment Objective and
Management Policies,"
  the Fund may from time to time invest more than 25% of its
total assets in
  a particular segment of the municipal securities market or
in obligations
  of issuers located in the same state.

  3. Issue senior securities if such issuance is
specifically prohibited by
  the 1940 Act or the rules and regulations thereunder.

  4. Borrow money in excess of 33% of its total assets
(including the amount
  of money borrowed but excluding any liabilities and
indebtedness not con-
  stituting senior securities) except that the Fund may
borrow up to an
  additional 5% of its total assets for temporary purposes;
or pledge its
  assets other than to secure such borrowings or in
connection with when-
  issued and forward commitment transactions and similar
investment
  strategies.

  5. Make loans of money or property to any person, except
to the extent
  that the securities in which the Fund may invest are
considered to be
  loans and except that the Fund may lend money or property
in connection
  with the maintenance of the value of or the Fund's
interest with respect
  to the municipal securities owned by the Fund.

  6. Buy any securities "on margin." Neither the deposit of
initial or vari-
  ation margin in connection with hedging and risk
management transactions
  nor short-term credits as may be necessary for the
clearance of transac-
  tions is considered the purchase of a security on margin.

  7. Sell any securities "short," write, purchase or sell
puts, calls or
  combinations thereof, or purchase or sell financial
futures or options,
  except as described under the heading "Investment
Objective and Management
  Policies--Investment Techniques" and in Appendix B to this
Prospectus.

  8. Act as an underwriter of securities, except to the
extent that the Fund
  may be deemed to be an underwriter in connection with the
sale of securi-
  ties held in its portfolio.

  9. Make investments for the purpose of exercising control
or participation
  in management, except to the extent that exercise by the
Fund of its
  rights under agreements related to municipal securities
would be deemed to
  constitute such control or participation.


29
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

INVESTMENT RESTRICTIONS (CONTINUED)


  10. Invest in securities of other investment companies in
an amount
  exceeding the limitation set forth in the 1940 Act and the
rules thereun-
  der, except as part of a merger, consolidation or other
acquisition.

  11. Invest in equity interests in oil, gas or other
mineral exploration or
  development programs except pursuant to the exercise by
the Fund of its
  rights under agreements relating to municipal securities.

  12. Purchase or sell real estate, commodities or commodity
contracts,
  except to the extent that the municipal securities the
Fund may invest in
  are considered to be interests in real estate, commodities
or commodity
  contracts, or to the extent that the Fund exercises its
rights under
  agreements relating to such municipal securities (in which
case the Fund
  may liquidate real estate acquired as a result of default
on a mortgage).

  The Fund generally will not engage in the trading of
securities for the pur-
pose of realizing short-term profits, but it will adjust its
portfolio as it
deems advisable in view of prevailing or anticipated market
conditions to
accomplish the Fund's investment objective. For example, the
Fund may sell
portfolio securities in anticipation of a movement in
interest rates. Other
than for tax purposes, frequency of portfolio turnover will
not be a limiting
factor if the Fund considers it advantageous to purchase or
sell securities.

30
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

SHARE PRICE DATA

  The Fund's Common Stock is listed on the AMEX under the
symbol "SBI." Smith
Barney also intends to make a market in the Common Stock.

  The following table sets forth for the Fund's Common Stock
the following
information for each quarterly period during the last two
fiscal years: high
and low sales prices and net asset values; sales price and
net asset value at
quarter-end; and the premium (discount) of the sales price
to net asset value
at quarter-end.

<TABLE>
<CAPTION>
                                          AMEX
THREE          AMEX           NAV       PRICE AT  NAV AT
MONTHS        PRICE          PRICE      QUARTER- QUARTER-
PREMIUM
ENDED         RANGE          RANGE        END      END
(DISCOUNT)
------------------------------------------------------------
--------
<S>       <C>            <C>            <C>      <C>
<C>
 3/31/94  $11.25 - 10.00 $10.89 - 10.29  $10.00   $10.29
(2.82)%
 6/30/94   10.38 -  9.88  10.47 - 10.15   10.00    10.24
(2.34)
 9/30/94   10.50 -  9.63  10.34 - 10.19    9.88    10.19
(3.09)
12/31/94    9.88 -  8.63  10.19 -  9.75    9.50     9.95
(4.52)
 3/31/95    9.88 -  9.38  10.31 -  9.95    9.63    10.31
(6.64)
 6/30/95   10.25 -  9.50  10.60 - 10.28    9.88    10.39
(4.96)
 9/30/95   10.25 -  9.75  10.59 - 10.35   10.00    10.50
(4.76)
12/31/95   10.38 - 10.00  10.71 - 10.52   10.38    10.66
(2.67)
------------------------------------------------------------
--------
</TABLE>

 As of March 15, 1996, the price per share of Common Stock
as quoted on the
AMEX was $10.53, representing a 1.30% premium to the Common
Stock's net asset value calculated on that day.


31
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

MANAGEMENT OF THE FUND

 DIRECTORS AND OFFICERS

  The business and affairs of the Fund, including the
general supervision of
the duties performed by the Investment Manager under the
Investment Management
Agreement, are the responsibility of the Fund's Board of
Directors. The Direc-
tors and officers of the Fund, their addresses and their
principal occupations
for at least the past five years are set forth below:

<TABLE>
<CAPTION>
                         POSITIONS HELD        PRINCIPAL
OCCUPATIONS
NAME AND ADDRESS         WITH THE FUND     DURING PAST FIVE
YEARS AND AGE
------------------------------------------------------------
-------------
<S>                      <C>               <C>
*+Heath B. McLendon      Chairman of the     Managing
Director of
388 Greenwich Street     Board of            Smith Barney;
Director of
New York, NY 10013       Directors and       forty-one
investment com-
                         Chief Executive     panies
associated with
                         Officer             Smith Barney;
Chairman of
                                             the Board of
Smith Barney
                                             Strategy
Advisers Inc.
                                             and President
of SBMFM.
                                             Formerly,
Senior Execu-
                                             tive Vice
President of
                                             Shearson Lehman
Brothers
                                             Inc.; Vice
Chairman of
                                             Shearson Asset
Manage-
                                             ment; Director
of
                                             PanAgora Asset
Manage-
                                             ment, Inc. and
PanAgora
                                             Asset
Management Limited;
                                             62.
*+Jessica Bibliowicz     Director and        Executive Vice
President
388 Greenwich Street     President           of Smith
Barney; Director
New York, NY 10013                           of twelve
investment com-
                                             panies
associated with
                                             Smith Barney;
President
                                             of thirty-nine
investment
                                             companies
associated with
                                             Smith Barney.
Formerly
                                             Director of
Sales and
                                             Marketing for
Prudential
                                             Mutual Funds;
prior to
                                             September 1991,
First
                                             Vice President,
Asset
                                             Management
Division of
                                             Shearson Lehman
Brothers,
                                             Inc.; 36.
+Joseph H. Fleiss        Director            Retired;
Director of ten
3849 Torrey Pines Blvd.                      investment
companies
Sarasota, FL 34238                           associated with
Smith
                                             Barney.
Formerly Senior
                                             Vice President
of
                                             Citibank;
Manager of
                                             Citibank's Bond
Invest-
                                             ment Fund and
Money Man-
                                             agement Desk
and a Direc-
                                             tor of Citicorp
Securi-
                                             ties Co., Inc.;
78.
</TABLE>

32
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

MANAGEMENT OF THE FUND (CONTINUED)

<TABLE>
<CAPTION>
                            POSITIONS HELD        PRINCIPAL
OCCUPATIONS
NAME AND ADDRESS            WITH THE FUND     DURING PAST
FIVE YEARS AND AGE
------------------------------------------------------------
----------------
<S>                         <C>               <C>
+Donald R. Foley            Director            Retired;
Director of ten
3668 Freshwater Drive                           investment
companies
Jupiter, FL 33477                               associated
with Smith
                                                Barney.
Formerly Vice
                                                President of
Edwin Bird
                                                Wilson,
Incorporated (ad-
                                                vertising);
73.
+Paul Hardin                Director            Professor of
Law at the
60134 Davie Street                              University
of North Caro-
Chapel Hill, NC 27599                           lina at
Chapel Hill;
                                                Director of
twelve
                                                investment
companies
                                                associated
with Smith
                                                Barney;
Director of The
                                                Summit
Bancorporation.
                                                Formerly,
Chancellor of
                                                the
University of North
                                                Carolina at
Chapel Hill;
                                                64.
+Francis P. Martin          Director            Practicing
physician;
2000 North Village Ave.                         Director of
ten invest-
Rockville Centre, NY 11570                      ment
companies associated
                                                with Smith
Barney. For-
                                                merly
President of the
                                                Nassau
Physicians' Fund,
                                                Inc; 71.
+Roderick C. Rasmussen      Director            Investment
Counselor;
81 Mountain Road                                Director of
ten invest-
Verona, NJ 07044                                ment
companies associated
                                                with Smith
Barney. For-
                                                merly Vice
President of
                                                Dresdner and
Company Inc.
                                                (Investment
counselors);
                                                69.
+John P. Toolan             Director            Retired;
Director of ten
82 Druid Road                                   investment
companies
Summit, NJ 07901                                associated
with Smith
                                                Barney.
Formerly, Direc-
                                                tor and
Chairman of Smith
                                                Barney Trust
Company,
                                                Director of
Smith Barney
                                                and SBMFM
and Senior
                                                Executive
Vice President,
                                                Director and
Member of
                                                the
Executive Committee
                                                of Smith
Barney; 65.
+C. Richard Youngdahl       Director            Retired;
Director of ten
339 River Drive                                 investment
companies
Tequesta, FL 33469                              associated
with Smith
                                                Barney;
Member of the
                                                Board of
Directors of
                                                D.W. Rich &
Company, Inc.
                                                Formerly
Chairman of the
                                                Board of
Pensions of the
                                                Lutheran
Church in Ameri-
                                                ca; Chairman
of the Board
                                                and Chief
Executive Offi-
                                                cer of
Aubrey G. Lanston
                                                & Co.
(dealers in U.S.
                                                Government
securities)
                                                and
President of the
                                                Association
of Primary
                                                Dealers in
U.S. Govern-
                                                ment
Securities; 80.
</TABLE>


33
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

MANAGEMENT OF THE FUND (CONTINUED)

<TABLE>
<CAPTION>
                      POSITIONS HELD        PRINCIPAL
OCCUPATIONS
NAME AND ADDRESS      WITH THE FUND     DURING PAST FIVE
YEARS AND AGE
------------------------------------------------------------
----------
<S>                   <C>               <C>
Lewis E. Daidone      Senior Vice         Managing Director
of
388 Greenwich Street  President,          Smith Barney,
Senior Vice
New York, NY 10013    Chief Financial     President and/or
Trea-
                      and                 surer of other
investment
                      Accounting          companies
associated with
                      Officer and         Smith Barney;
Director
                      Treasurer           and Senior Vice
President
                                          of SBMFM and
Senior Vice
                                          President of Smith
Barney
                                          Strategy Advisers
Inc.;
                                          38.
Peter Coffey          Vice President      Vice President of
SBMFM;
388 Greenwich Street  and Investment      investment officer
of
New York, NY 10013    Officer             other investment
compa-
                                          nies associated
with
                                          Smith Barney;
Managing
                                          Director of Smith
Barney;
                                          48.
Thomas M. Reynolds    Controller and      Director of Smith
Barney
388 Greenwich Street  Assistant           in the Financial
Services
New York, NY 10013    Secretary           Division and
Controller
                                          and Assistant
Secretary
                                          of certain other
invest-
                                          ment companies
associated
                                          with Smith Barney.
Prior
                                          to September 1991,
Assis-
                                          tant Treasurer of
Aquila
                                          Management
Corporation
                                          and its associated
                                          investment
companies; 36.
Christina T. Sydor    Secretary           Managing Director
of
388 Greenwich Street                      Smith Barney and
Secre-
New York, NY 10013                        tary of the other
Invest-
                                          ment companies
associated
                                          with Smith Barney;
Secre-
                                          tary and General
Counsel
                                          of SBMFM; 44.
------------------------------------------------------------
----------
</TABLE>
* "Interested person" of the Fund as defined in the 1940
Act.

+ Director, trustee and/or general partner of other
investment companies reg-
  istered under the 1940 Act with which Smith Barney is
affiliated.

  Fees for Directors who are not "interested persons" of the
Fund and who are
directors of a group of funds sponsored by Smith Barney are
set at $40,000 per
annum and are allocated based on relative net assets of each
fund in the
group. In addition, these Directors receive $100 per fund or
portfolio for
each day of Board meetings attended plus travel and out-of-
pocket expenses
incurred in connection with Board meetings. The Board
meeting fees and out-of-
pocket expenses are borne equally by each individual fund or
portfolio in the
group.


34
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

MANAGEMENT OF THE FUND (CONTINUED)

  The following table shows the compensation paid by the
Fund to each incum-
bent Director during the Fund's most recent fiscal year
(from January 1, 1995
to December 31, 1995).

                              COMPENSATION TABLE

<TABLE>
<CAPTION>

TOTAL
                                       PENSION OR
COMPENSATION      NUMBER OF
                                       RETIREMENT
FROM FUND       FUNDS FOR
                        AGGREGATE   BENEFITS ACCRUED     AND
FUND      WHICH DIRECTOR
                       COMPENSATION    AS PART OF
COMPLEX      SERVES WITHIN
   NAME OF PERSON       FROM FUND    FUND EXPENSES   PAID TO
DIRECTORS  FUND COMPLEX
   --------------      ------------ ---------------- -------
---------- --------------
<S>                    <C>          <C>              <C>
<C>
Jessica Bibliowicz*        $ 0            $ 0            $
0           12
Joseph H. Fleiss           503              0
53,300.00           10
Donald R. Foley            603              0
56,100.00           10
Paul Hardin                403              0
50,500.00           12
Francis P. Martin          603              0
56,100.00           10
Heath B. McLendon*           0              0
0           41
Roderick C. Rasmussen      603              0
56,100.00           10
John P. Toolan             603              0
56,100.00           10
C. Richard Youngdahl       503              0
53,300.00           10
</TABLE>
----------
* Designates an "interested director".

  At the close of business on March 8, 1996, 7,974,267
shares of Common Stock
or 96.2% of the Fund's total shares outstanding on that date
were held in
accounts, but not beneficially owned by, CEDE & Co., c/o
Depository Trust Com-
pany, Box 20, Bowling Green Station, NY, NY 10004-9998. As
of that date, the
officers and Board members of the Fund beneficially owned
less than 1% of the
outstanding shares of the Fund.

 INVESTMENT MANAGER

  Greenwich Street Advisors, a division of Smith Barney
Mutual Funds Manage-
ment Inc. ("SBMFM" or the "Investment Manager") serves as
the Fund's invest-
ment manager. SBMFM, located at 388 Greenwich Street, New
York, New York
10013, serves as the Fund's investment adviser pursuant to a
transfer of the
investment advisory agreement effective December 31, 1994,
from its affiliate,
Mutual Management Corp. (Mutual Management Corp. and SBMFM
are both wholly
owned subsidiaries of Holdings, which in turn is a wholly-
owned subsidiary of
Travelers.) Investment advisory services continue to be
provided to the Fund
by the same portfolio managers who had provided services
under the agreement
with Mutual Management Corp. SBMFM (through its
predecessors) has been in the
investment counseling business since 1934 and is a
registered investment
adviser. SBMFM was incorporated in 1968 and currently


35
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

MANAGEMENT OF THE FUND (CONTINUED)

manages investment companies that had total assets in excess
of $64 billion as
of November 30, 1995, of which approximately $7.7 billion
consisted of munici-
pal bond portfolios.

  Pursuant to the Investment Management Agreement (the
"Management Agree-
ment"), the Fund has retained the Investment Manager to
manage the investment
of the Fund's assets and to provide such investment
research, advice and
supervision, in conformity with the Fund's investment
objective and policies,
as may be necessary for the investment activities of the
Fund. The Investment
Manager also administers the Fund's corporate affairs
subject to the supervi-
sion of the Fund's Board of Directors and in connection
therewith furnishes
the Fund with office facilities together with such ordinary
clerical and book-
keeping services (e.g., preparation of annual and other
reports to sharehold-
ers and the SEC and filing of Federal, state and local
income tax returns) as
are not being furnished by the Fund's custodian.

  The Management Agreement provides, among other things,
that the Investment
Manager will bear all expenses of its employees and overhead
incurred in con-
nection with its duties under the Management Agreement,
other than those
assumed by the Fund, as described below, and will pay all
director's fees and
salaries of the Fund's directors and officers who are
affiliated persons (as
such term is defined in the 1940 Act) of the Investment
Manager.

  The Management Agreement provides that the Fund shall pay
to the Investment
Manager a monthly fee in arrears equal to .60% per annum of
the Fund's average
daily net assets during the month.

  Although the Investment Manager intends to devote such
time and effort to
the business of the Fund as reasonably necessary to perform
its duties to the
Fund, the services of the Investment Manager are not
exclusive and the Invest-
ment Manager provides similar services to other investment
companies and may
engage in other activities.

  The Management Agreement also provides that in the absence
of willful mis-
feasance, bad faith, gross negligence or reckless disregard
of its obligations
thereunder, the Investment Manager is not liable to the Fund
or any of the
Fund's shareholders for any act or omission by the
Investment Manager in the
supervision or management of its investment activities or
for any loss sus-
tained by the Fund or the Fund's shareholders.

  The Management Agreement will continue in effect for
successive periods of
12 months, provided that each continuance is specifically
approved at least

36
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

MANAGEMENT OF THE FUND (CONTINUED)

annually by both (1) the vote of a majority of the Fund's
Board of Directors
or the vote of a majority of the outstanding voting
securities of the Fund (as
such term is defined in the 1940 Act) and (2) by the vote of
a majority of the
directors who are not parties to such Agreement or
interested persons (as such
term is defined in the 1940 Act) of any such party, cast in
person at a meet-
ing called for the purpose of voting on such approval. The
Management Agree-
ment may be terminated as a whole at any time by the Fund,
without the payment
of any penalty, upon the vote of a majority of the Fund's
Board of Directors
or a majority of the outstanding voting securities of the
Fund or by the
Investment Manager, on 60 days' written notice by either
party to the other.
The Management Agreement will terminate automatically in the
event of its
assignment (as such term is defined in the 1940 Act and the
rules thereunder).

  For each of the years ended December 31, 1993, December
31, 1994 and Decem-
ber 31, 1995, the Fund paid $521,796, $510,106 and $517,473,
respectively, in
management fees to SBMFM.

  Peter Coffey, Vice President and Investment Officer of the
Fund, is primar-
ily responsible for management of the Fund's assets. Mr.
Coffey is a Vice
President of the Investment Manager and is the senior asset
manager for eight
other investment companies and other accounts investing in
tax-exempt securi-
ties with aggregate assets of approximately $1.6 billion as
of February 5,
1996.

  Except as indicated above, the Fund will pay all of its
expenses, including
fees of the directors not affiliated with the Investment
Manager and Board
meeting expenses; fees of the Investment Manager; interest
charges; taxes;
charges and expenses of the Fund's legal counsel and
independent accountants,
and of the transfer agent, registrar and dividend disbursing
agent of the
Fund; expenses of repurchasing shares; expenses of printing
and mailing share
certificates, shareholder reports, notices, proxy statements
and reports to
governmental offices; brokerage and other expenses connected
with the execu-
tion, recording and settlement of portfolio security
transactions; expenses
connected with negotiating of, effecting purchase or sale
of, or registering
privately issued portfolio securities; fees and expenses of
the Fund's custo-
dian for all services to the Fund, including safekeeping of
funds and securi-
ties and maintaining required books and accounts; expenses
of calculating and
publishing the net asset value of the Fund's Common Stock;
expenses of member-
ship in investment company associations; expenses of
fidelity bonding and
other insurance premiums; expenses of shareholders'
meetings; SEC and state
blue sky registration fees; American Stock Exchange listing
fees; and its
other business and operating expenses.



37
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

SECURITIES TRANSACTIONS AND TURNOVER

 GENERAL

  Subject to the general supervision of the Board of
Directors, the Investment
Manager is responsible for decisions to buy and sell
securities and the selec-
tion of brokers and dealers to effect the transactions. The
Fund invests pri-
marily in the over-the-counter market. Securities are
generally traded in the
over-the-counter market on a "net" basis with dealers acting
as principal for
their own accounts without charging a stated commission,
although the price of
the security usually includes a profit to the dealer. The
Fund also purchases
securities at times in underwritten offerings, where the
price includes a
fixed amount of compensation, generally referred to as the
underwriter's con-
cession or discount. On occasion, the Fund may also purchase
certain money
market instruments directly from an issuer, in which case no
commissions or
discounts are paid. The Fund will not engage in any
principal transactions
with Smith Barney.

  The Investment Manager currently serves as investment
adviser to other
investment companies, some of which invest principally in
municipal securi-
ties. In the future it may act as investment adviser to
other investment com-
panies or accounts that invest in municipal securities.
Although each invest-
ment company is individually managed, from time to time the
Investment Manager
may, to the extent permitted by law, allocate purchase or
sale transactions
among various investment companies and other accounts. In
making such alloca-
tions the Investment Manager will consider, among other
things, the respective
investment objectives, the relative size of portfolio
holdings of the same or
comparable securities and the liquidity of the portfolio.

  The policy of the Fund regarding purchases and sales of
securities for its
portfolio is that primary consideration will be given to
obtaining the most
favorable prices consistent with efficient execution of
transactions in seek-
ing to implement the Fund's policies. The Investment Manager
will effect
transactions with those dealers who the Investment Manager
believes provide
the most favorable prices and who are capable of providing
efficient execu-
tions. Those factors that the Investment Manager believes
contribute to effi-
cient execution include size of the order, difficulty of
execution, opera-
tional capabilities and facilities of the dealer involved,
whether that dealer
has risked its own capital in positioning a block of
securities and the deal-
er's prior experience in effecting transactions of this
type. If the Invest-
ment Manager believes such price and execution are
obtainable from more than
one dealer, it may give consideration to placing portfolio
transactions with
those dealers who also furnish research and other services
to the Investment
Manager. Such services may include, but are not limited to,
any one or more of
the following: information as to the availability of
securities for

38
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

SECURITIES TRANSACTIONS AND TURNOVER (CONTINUED)

purchase or sale; statistical or factual information or
opinions pertaining to
investment; economic analysis; and appraisals or evaluations
of portfolio
securities.

  The information and services so received by the Investment
Manager may be of
benefit to the Investment Manager in the management of other
accounts and may
not in all cases benefit the Fund directly. While the
receipt of such informa-
tion and services is useful in varying degrees and would
generally reduce the
amount of research or services otherwise performed by the
Investment Manager
and thus may reduce its expenses, it is of indeterminable
value and the advi-
sory fee paid to the Investment Manager is not reduced by
any amount that may
be attributable to the value of such services.

 TURNOVER

  The Fund cannot accurately predict its turnover rate, but
anticipates that
its annual turnover rate will not exceed 100%. The Fund's
turnover rate is
calculated by dividing the lesser of the Fund's sales or
purchases of securi-
ties during a year (excluding any security the maturity of
which at the time
of acquisition is one year or less) by the average monthly
value of the Fund's
securities for the year. Higher turnover rates can result in
corresponding
increases in the Fund's transaction costs, which must be
borne by the Fund and
its shareholders. High portfolio turnover may also result in
the realization
of substantial net short-term capital gains, and any
distributions resulting
from such gains will be taxable at ordinary income rates for
Federal income
tax purposes. The Fund will not consider turnover rate a
limiting factor in
making investment decisions consistent with its investment
objective and
policies.

DIVIDENDS AND DISTRIBUTIONS; DIVIDEND REINVESTMENT PLAN


  The Fund expects to pay monthly dividends of substantially
all net invest-
ment income (that is, income (including its tax-exempt
income and its accrued
original issue discount income) other than net realized
capital gains) to the
holders of the Common Stock. Under the Fund's current
policy, which may be
changed at any time by its Board of Directors, the Fund's
monthly dividends
will be made at a level that reflects the past and projected
performance of
the Fund, which policy over time will result in the
distribution of all net
investment income of the Fund. Net income of the Fund
consists of all interest
income accrued on the Fund's assets less all expenses of the
Fund. Expenses of
the Fund are accrued each day. Net realized capital gains,
if any, will be
distributed to the shareholders at least once a year. Net
income available for
distribution will also be reduced by dividends on any
preferred stock.



39
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

DIVIDENDS AND DISTRIBUTIONS; DIVIDEND REINVESTMENT PLAN
(CONTINUED)

  Pursuant to the Fund's Dividend Reinvestment Plan (the
"Plan"), all distri-
butions will be automatically reinvested by First Data, as
plan agent (the
"Plan Agent") in additional Common Stock as provided below
unless a share-
holder elects to receive cash.

  Distributions with respect to Common Stock registered in
the name of a
broker-dealer or other nominee (i.e., in "street name") will
be reinvested by
the broker or nominee in additional shares under the Plan,
unless the service
is not provided by the broker or nominee. Investors who own
Common Stock reg-
istered in street name should consult their broker-dealer
for details. All
distributions to shareholders who do not participate in the
Plan will be paid
by check mailed directly to the record holder by First Data,
as dividend dis-
bursing agent.

  If the Fund declares a distribution payable either in
shares of Common Stock
or in cash, nonparticipants in the Plan will receive cash,
and Plan partici-
pants will receive the equivalent amount in shares of Common
Stock valued in
the following manner: whenever the market price is equal to
or exceeds the net
asset value per share at the time the Common Stock is valued
for the purpose
of determining the number of Common Stock shares equivalent
to the cash dis-
tribution, participants will be issued shares of Common
Stock valued at the
greater of (1) the net asset value most recently determined
as provided under
"Net Asset Value" or (2) 95% of the then current market
price of the Common
Stock.

  If the net asset value of the Common Stock at the time of
valuation exceeds
the market price of the Common Stock, or if the Fund
declares a distribution
payable only in cash, the Plan Agent will buy Common Stock
in the open market,
on the American Stock Exchange or elsewhere, for the
participants' accounts.
If, following the commencement of purchases and before the
Plan Agent has com-
pleted its purchases the market price exceeds the net asset
value of the Com-
mon Stock, the Plan Agent may cease purchasing shares in the
open market and
the Fund may issue the remaining shares at a price equal to
the greater of (a)
net asset value or (b) 95% of the then current market price.
The Plan Agent
will apply all cash received as a distribution to purchase
Common Stock on the
open market as soon as practicable after the payment date of
the distribution,
but in no event later than 30 days after such date, except
when necessary to
comply with applicable provisions of the Federal securities
laws.

  Participants in the Plan may withdraw from the Plan upon
written notice to
the Plan Agent which must be received at least ten business
days prior to the

40
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

DIVIDENDS AND DISTRIBUTIONS; DIVIDEND REINVESTMENT PLAN
(CONTINUED)

distribution record date to become effective for that
distribution. Shares in
the account of each Plan participant will be held by the
Plan Agent in non-
certificated form in the name of the Plan Agent or
participant, and each
shareholder's proxy will include those shares of Common
Stock purchased pursu-
ant to the Plan. When a participant withdraws from the Plan
or upon termina-
tion of the Plan as provided below, certificates for whole
Fund shares cred-
ited to his or her account under the Plan will be issued and
a cash payment
will be made for any fraction of a Fund share credited to
such account.

  The Plan Agent will maintain each shareholder's account in
the Plan and fur-
nish written confirmations of all transactions in the
accounts, including
information needed by shareholders for personal and tax
records.

  In the case of shareholders, such as banks, brokers or
nominees, that hold
Common Stock for others who are the beneficial owners, the
Plan Agent will
administer the Plan on the basis of the number of shares of
Common Stock cer-
tified from time to time by the record shareholders, as
representing the total
amount registered in the record shareholder's name and held
for the account of
beneficial owners who are participants in the Plan.

  The automatic reinvestment of distributions will not
relieve participants of
any Federal income tax that may be payable on such
distributions.

  The Fund will not charge participants for reinvesting
distributions. Any
Plan Agent's fees for the handling of reinvestment of
distributions under the
Plan will be paid by the Fund. There will be no brokerage
charges with respect
to Common Stock issued directly by the Fund as a result of
distributions pay-
able either in stock or in cash. However, each participant
will pay a pro rata
share of brokerage commissions incurred with respect to the
Plan Agent's open
market purchases in connection with the reinvestment of
distributions.

  Experience under the Plan may indicate that changes are
desirable. Accord-
ingly, the Fund and the Plan Agent reserve the right to
amend the Plan as
applied to any distribution paid subsequent to written
notice of the change
sent to all shareholders of the Fund at least 90 days before
the record date
for the distribution. The Plan also may be terminated by the
Fund or the Plan
Agent by at least 30 days' written notice to all
shareholders of the Fund. All
correspondence concerning the Plan should be directed to the
Plan Agent at
First Data Investors Services Group, Inc., One Exchange
Place, Boston, Massa-
chusetts 02109 or by telephone at 1-800-331-1710.


41
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

NET ASSET VALUE


  The net asset value per share of the Fund's Common Stock
is determined by
calculating the total value of the Fund's assets, deducting
its total liabili-
ties and the liquidation value of any preferred stock
outstanding, and divid-
ing the result by the number of shares of Common Stock
outstanding. The net
asset value will be computed as of the close of regular
trading on the New
York Stock Exchange ("NYSE") on each day that the NYSE is
open. The Fund
reserves the right to calculate the net asset value more
frequently if deemed
desirable.

  The Fund's securities will be valued on the basis of bid
prices provided by
a pricing service when the Fund believes such prices reflect
fair market val-
ue. Pricing services generally determine value by reference
to transactions in
municipal securities, quotations from municipal bond
dealers, market transac-
tions in comparable securities and various relationships
between securities.
If a pricing service is not used, municipal securities will
be valued at the
quoted bid prices provided by municipal bond dealers. Short-
term instruments
maturing within 60 days will be valued at cost plus
amortized discount, if
any, when the Board of Directors has determined that
amortized cost equals
fair value. Securities and other assets that are not priced
by a pricing serv-
ice and for which market quotations are not available will
be valued in good
faith at fair value by or under the direction of the Board
of Directors.

  If any securities held by the Fund are restricted as to
resale, the Invest-
ment Manager will determine their fair value following
procedures approved by
the directors. The directors will periodically review such
valuations and pro-
cedures. The fair value of such securities generally will be
determined as the
amount which the Fund could reasonably expect to realize
from an orderly dis-
position of such securities over a reasonable period of
time. The valuation
procedures applied in any specific instance are likely to
vary from case to
case. However, consideration will be generally given to the
financial position
of the issuer and other fundamental analytical data relating
to the investment
and to the nature of the restrictions on disposition of
securities (including
any registration expenses that might be borne by the Fund in
connection with
such disposition). In addition, specific factors also
generally will be con-
sidered, such as the cost of the investment, the market
value of any unre-
stricted securities of the same class (both at the time of
purchase and at the
time of valuation), the size of the holding, the prices of
any recent transac-
tions or offers with respect to such securities, and any
available analysts'
reports regarding the issuer. Shares of closed-end
investment companies fre-
quently trade at a discount from net asset value, but in
some cases trade at a
premium. Since the market price of the Fund's shares will be
determined by
such factors as trading volume of the shares, gen-

42
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

NET ASSET VALUE (CONTINUED)

eral market and economic conditions and other factors beyond
the control of
the Fund, the Fund cannot predict whether its shares will
trade at, below or
above its computed net asset value.

TAXATION


  The Federal income tax discussion set forth below is for
general information
only. Investors should consult their own advisors regarding
the specific Fed-
eral tax consequences of holding and disposing of Common
Stock, as well as the
effects of state, local and foreign tax laws.

 TAXATION OF THE FUND

  The Fund has qualified and intends to continue to qualify
each year to be
treated as a regulated investment company under Subchapter M
of the Code. To
qualify as a regulated investment company, the Fund must,
among other things,
(i) derive at least 90% of its gross income in each taxable
year from divi-
dends, interest, proceeds from loans of stock and
securities, gains from the
sale or other disposition of stock or securities, or certain
other income (in-
cluding but not limited to gains from options and futures
contracts) derived
from its business of investing in stock or securities; (ii)
derive less than
30% of its gross income in each taxable year from the sale
or other disposi-
tion of stocks, securities, options or futures contracts
that were held for
less than three months; and (iii) diversify its holdings so
that, at the end
of each quarter of its taxable year: (a) at least 50% of the
market value of
the Fund's total assets is represented by cash, U.S.
Government securities,
securities of other regulated investment companies and other
securities, with
such other securities limited, in respect of any one issuer,
to an amount not
greater than 5% of the Fund's assets and not more than 10%
of the outstanding
voting securities of such issuer; and (b) not more than 25%
of the value of
the Fund's assets is invested in securities of any one
issuer (other than U.S.
Government securities or securities of other regulated
investment companies).

  Legislation currently pending before the U.S. Congress
would repeal the
requirement contained in Subchapter M of the Code that a
regulated investment
company must derive less than 30% of its gross income from
the sale or other
disposition of assets described above that are held for less
than three
months. It is unclear at this time whether this legislation
will become law
and, if it is so enacted, the form it will take.

  If the Fund so qualifies and distributes to its
shareholders at least 90% of
its net investment income (including tax-exempt interest and
other taxable
income including net short-term capital gain, but not net
capital gains, which
are the


43
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

TAXATION (CONTINUED)

excess of net long-term capital gains over net short-term
capital losses) in
each year, it will not be required to pay Federal income
taxes on any income
distributed to shareholders. The Fund intends to distribute
at least the mini-
mum amount of net investment income necessary to satisfy the
90% distribution
requirement.

  If at any time when any shares of preferred stock are
outstanding the Fund
does not meet applicable asset coverage requirements, the
Fund would be
required to suspend distributions to holders of Common Stock
until the asset
coverage is restored. See "Description of Shares." Any such
suspension may
prevent the Fund from satisfying the 90% distribution
requirement and the dis-
tribution requirements for avoiding income or excise taxes
(as described
below), with the result that, among other things, dividends
paid by the Fund
in that year will not be tax-exempt. Upon any failure to
meet applicable asset
coverage requirements, however, the Fund currently intends
to redeem shares of
preferred stock in order to maintain or restore the
requisite asset coverage
and allow the Fund to make distributions necessary to
satisfy the 90% distri-
bution requirement and avoid income and excise taxes.

  The Fund will generally be subject to a nondeductible
excise tax of 4% to
the extent that it does not meet certain minimum
distribution requirements as
of the end of each calendar year. The Fund intends to make
timely distribu-
tions of its income (including any net capital gains) in
compliance with these
requirements. As a result, it is anticipated that the Fund
will not be subject
to the excise tax.

  Options and futures contracts entered into by the Fund may
create "strad-
dles" for Federal income tax purposes and this may affect
the character and
timing of gains or losses realized by the Fund on such
contracts or options or
on the underlying securities. Straddles may also result in
the loss of the
holding period of underlying property, and therefore, the
Fund's ability to
enter into options and futures contracts may be limited by
the 30% of gross
income test described above.

  Certain options and futures contracts held by the Fund at
the end of each
taxable year will be required to be "marked to market" for
Federal income tax
purposes; that is, treated as having been sold at market
value. Sixty percent
of any capital gain or loss recognized on these deemed sales
and on actual
dispositions will be treated as long-term capital gain or
loss, and the
remainder will be treated as short-term capital gain or loss
regardless of how
long the Fund has held such options or contracts.

44
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

TAXATION (CONTINUED)


 DISTRIBUTIONS

  If, at the close of each quarter of the Fund's taxable
year, at least 50% of
the total value of the Fund's total assets consists of
obligations exempt from
Federal income tax, the Fund will be qualified to pay exempt-
interest dividends
to its shareholders to the extent of its tax-exempt interest
income (less
expenses applicable thereto). Exempt-interest dividends are
treated by share-
holders as interest excludable from their gross income for
Federal income tax
purposes but are included in determining what portion, if
any, of a person's
social security and railroad retirement benefits will be
includable in gross
income subject to Federal income tax. Exempt-interest
dividends may be subject
to state and local tax. Interest with respect to
indebtedness incurred or con-
tinued by a shareholder to purchase or carry shares of the
Fund is not deduct-
ible to the extent that such dividends relate to exempt-
interest dividends
received from the Fund.

  In accordance with a revenue ruling issued by the Internal
Revenue Service,
the Fund will designate distributions made to holders of
Common Stock and to
holders of any outstanding shares of preferred stock in
accordance with each
class's proportionate share of each item of Fund income
(such as net capital
gains and other taxable income). The terms of the shares of
any preferred stock
may require the Fund to pay an additional dividend on the
preferred stock in an
amount such that the net after tax return to such preferred
stocks would be the
same as the net after tax return that would have been
derived if the dividends
paid to such preferred shareholders, including any
additional dividends with
respect to shares of the preferred stock, had qualified in
their entirety as
tax-exempt income.

  Distributions of the Fund's investment company taxable
income (which does not
include tax-exempt interest income) are taxable to holders
of Common Stock and
any preferred shareholders as ordinary income whether paid
in cash or, in the
case of holders of Common Stock, reinvested in additional
Common Stock. Distri-
butions of the Fund's net capital gains ("capital gains
dividends"), if any,
whether paid in cash or, in the case of holders of Common
Stock, reinvested in
additional Common Stock, are taxable to holders of Common
Stock and any pre-
ferred shareholders at the rates applicable to long-term
capital gains regard-
less of the length of time shares of the Fund have been held
by such holders of
Common Stock and any preferred shareholders. Distributions
in excess of the
Fund's earnings and profits will first reduce the adjusted
tax basis of a hold-
er's shares and, after such adjusted tax basis is reduced to
zero, will consti-
tute capital gains to such holder (assuming such shares are
held as a capital
asset). It


45
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

TAXATION (CONTINUED)

is not expected that any portion of the distributions from
the Fund will be
eligible for the dividends received deduction for
corporations.

  The Fund will inform shareholders of the source and tax
status of all dis-
tributions promptly after the close of each calendar year. A
portion of such
distributions may constitute taxable income and a return of
capital, regard-
less of whether such distributions are received in cash or
in the form of Com-
mon Stock. Holders of Common Stock receiving distributions
in the form of
additional shares of Common Stock issued by the Fund will be
treated for Fed-
eral income tax purposes as receiving a distribution in an
amount equal to the
fair market value of the Common Stock received, determined
as of the distribu-
tion date. The basis of such Common Stock will equal the
fair market value on
the distribution date. Holders of Common Stock receiving
distributions in the
form of additional shares of Common Stock purchased by the
Plan Agent under
the Fund's Dividend Reinvestment Plan will be treated for
Federal income tax
purposes as receiving the amount of cash received by the
Plan Agent on their
behalf. In general, the basis of such Common Stock will
equal the price paid
by the Plan Agent for such Common Stock.

  Although dividends generally will be treated as
distributed when paid, divi-
dends declared in October, November or December, payable to
shareholders of
record on a specified date in such a month and paid during
January of the fol-
lowing year will be treated as having been distributed by
the Fund and
received by the shareholders on the December 31 prior to the
date of payment.
In addition, certain other distributions made after the
close of a taxable
year of the Fund may be treated as paid by the Fund (except
for purposes of
the 4% excise tax) during such taxable year. In such case,
shareholders will
be treated as having received such dividends in the taxable
year in which the
distribution was actually made.

  Exempt-interest dividends allocable to interest received
by the Fund on cer-
tain "private activity" obligations issued after August 7,
1986 will be
treated as interest on such obligations and thus will give
rise to an item of
tax preference that will increase a shareholder's
alternative minimum taxable
income. Unless otherwise provided in regulations, the
portion of the Fund's
interest on such "private activity" obligations allocable to
holders of Common
Stock will correspond to the portion of the Fund's total net
tax-exempt income
distributed to holders of Common Stock. In addition, exempt-
interest divi-
dends, whether or not attributable to private activity
bonds, received by cor-
porations will be taken into account (i) in determining the
alternative mini-
mum tax imposed on 75%

46
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

TAXATION (CONTINUED)

of the excess of adjusted current earnings over alternative
minimum taxable
income (ii) in calculating the environmental tax equal to
0.12 percent of a
corporation's modified alternative minimum taxable income in
excess of $2 mil-
lion, and (iii) in determining the foreign branch profits
tax imposed on the
effectively connected earnings and profits (with
adjustments) of United States
branches of foreign corporations. Accordingly, investment in
the Fund may
cause holders of Common Stock to be subject to (or result in
an increased lia-
bility under) the alternative minimum tax, the environmental
tax or the branch
profits tax.

  Exempt-interest dividends will not be tax-exempt to the
extent made to any
shareholder who is a "substantial user" of the facilities
financed by tax-
exempt obligations held by the Fund or "related persons" of
such substantial
users.

  For taxpayers other than corporations, net capital gains
will be taxed at a
maximum marginal rate of 28%, while short-term capital gains
and other taxable
income will be taxed at a maximum marginal rate of 31%.

 SALES OF SHARES

  The sale of Common Stock (including transfers in
connection with a redemp-
tion or repurchase of Common Stock) will be a taxable
transaction for Federal
income tax purposes. Selling shareholders will generally
recognize gain or
loss in an amount equal to the difference between their
adjusted tax basis in
the Common Stock and the amount received. If such shares of
Common Stock are
held as a capital asset, the gain or loss will be a capital
gain or loss and
will be long-term if such shares have been held for more
than one year. Any
loss realized upon a taxable disposition of Common Stock
held for six months
or less will be disallowed to the extent of any exempt-
interest dividends
received with respect to such Common Stock. If any such loss
is not disal-
lowed, it will be treated as long-term capital loss to the
extent of any capi-
tal gains dividends received with respect to such Common
Stock. Additionally,
any loss realized on a redemption or exchange of Common
Stock will be disal-
lowed to the extent the shares disposed of are replaced
within a period of 61
days beginning 30 days before and ending 30 days after such
disposition, such
as pursuant to reinvestment of dividends in Common Stock.


47
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

TAXATION (CONTINUED)


 STATEMENTS AND NOTICES

  Statements as to the tax status of the dividends and
distributions received
by shareholders of the Fund are mailed annually. These
statements show the
dollar amount of income excluded from Federal income taxes
and the dollar
amount, if any, subject to Federal income taxes. The
statements will also des-
ignate the amount of exempt-interest dividends that are a
specific preference
item for purposes of the Federal individual and corporate
alternative minimum
taxes. The Fund will notify shareholders annually as to the
interest excluded
from Federal income taxes earned by the Fund with respect to
those states and
possessions in which the Fund has or had investments. The
dollar amount of
dividends paid by the Fund that is excluded from Federal
income taxation and
the dollar amount of dividends paid by the Fund that is
subject to Federal
income taxation, if any, will vary for each shareholder
depending upon the
size and duration of the shareholder's investment in the
Fund. To the extent
that the Fund earns taxable net investment income, it
intends to designate as
taxable dividends the same percentage of each day's dividend
as its taxable
net investment income bears to its total net investment
income earned on that
date. Therefore, the percentage of each day's dividend
designated as taxable,
if any, may vary from day to day.

 BACKUP WITHHOLDING

  If a shareholder fails to furnish a correct taxpayer
identification number,
fails to report fully dividend or interest income, or fails
to certify that he
has provided a correct taxpayer identification number and
that he is not sub-
ject to "backup withholding," the shareholder may be subject
to a 31% "backup
withholding" tax with respect to (1) taxable dividends and
distributions and
(2) the proceeds of any sales or repurchases of shares of
Common Stock. An
individual's taxpayer identification number is his social
security number. The
31% backup withholding tax is not an additional tax and may
be credited
against a taxpayer's Federal income tax liability.

DESCRIPTION OF SHARES


  The Fund was incorporated under the laws of the State of
Maryland on Decem-
ber 19, 1991 by the Articles of Incorporation. The Articles
of Incorporation
authorize issuance of the Common Stock. The Articles of
Incorporation provide
that the Fund shall continue without limitation of time.

48
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

DESCRIPTION OF SHARES (CONTINUED)


 COMMON STOCK

<TABLE>
<CAPTION>
                                                   AMOUNT
                                                OUTSTANDING
                                            EXCLUSIVE OF
SHARES
                                            HELD BY FUND FOR
ITS
                              AMOUNT HELD    OWN ACCOUNT AS
OF
  TITLE OF        SHARES    BY FUND FOR ITS       MARCH 8,
  CLASS         AUTHORIZED    OWN ACCOUNT           1996
------------------------------------------------------------
----
  <S>           <C>         <C>             <C>
Common Stock    100,000,000         0            8,288,885
</TABLE>

  No shares, other than those currently outstanding, are
offered for sale pur-
suant to this Prospectus.

  The Fund has authorized capital of 100 million shares, all
of which are cur-
rently designated as Common Stock, par value $.001 per
share. Unissued shares
of capital stock may be reclassified by the Board of
Directors without a share-
holder vote into one or more classes of preferred or other
stock with no
restrictions on the rights and preferences of any such
classes except as may be
imposed by the 1940 Act or Maryland law. The description of
preferred stock
below generally reflects the requirements of the 1940 Act.
The Fund may issue
preferred stock for such consideration as the Board
considers appropriate. Any
such consideration to be received by the Fund will be
limited to cash or
securities.

  Shares of Common Stock, when issued, are fully paid and
nonassessable. Share-
holders are entitled to one vote for each share of Common
Stock held for the
election of directors and other matters submitted to
shareholders. There are no
preemptive rights. Each share of Common Stock is entitled to
participate
equally in the net distributable assets of the Fund upon
liquidation or termi-
nation.

  If any preferred stock were outstanding, holders of the
Common Stock would
not be entitled to receive any net income of or other
distributions from the
Fund unless all accrued dividends on the preferred stock had
been paid, and
unless appropriate asset coverage was maintained.

  Under the requirements of the 1940 Act, the Fund must,
immediately after any
issuance of preferred stock and after giving effect to any
distribution on the
Common Stock, have an "asset coverage" of at least 200%.
With respect to pre-
ferred stock, asset coverage means the ratio which the value
of the total
assets of the Fund, less all liability and indebtedness not
represented by
senior securities (as defined in the 1940 Act), bears to the
aggregate amount
of senior


49
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

DESCRIPTION OF SHARES (CONTINUED)

securities representing indebtedness of the Fund, if any,
plus the aggregate
liquidation preference of the preferred stock. If the Fund
were to seek a rat-
ing of any preferred stock, asset coverage requirements in
addition to, and
more stringent than, those set forth in the 1940 Act may be
imposed. The liq-
uidation value of shares of the preferred stock would be
expected to equal
their aggregate original purchase price plus any accrued and
unpaid distribu-
tions thereon. In addition, such rating service could
require the Fund to
maintain a portion of its assets, in an amount approximating
the accrued dis-
tributions on the preferred stock plus certain projected
distribution amounts,
in short-term, high quality fixed income securities. The
terms of the pre-
ferred stock, including its distribution rate, voting
rights, liquidation
preference and redemption provisions, would be determined by
the Board at the
time of offering and may contain any provisions permitted by
applicable law.

  In the event of any voluntary or involuntary liquidation,
dissolution or
winding up of the Fund, the holders of preferred stock would
be entitled to
receive a preferential liquidating distribution expected to
equal the original
purchase price per share plus accrued and unpaid
distributions (whether or not
earned or declared) before any distribution of assets could
be made to holders
of Common Stock. After payment of the full amount of the
liquidating distribu-
tion to which they would be entitled, the holders of
preferred stock would not
be entitled to any further participation in any distribution
of assets by the
Fund. A consolidation or merger of the Fund with or into any
other corporation
or corporations or a sale of all or substantially all of the
assets of the
Fund shall not be deemed to be a liquidation, dissolution or
winding up of the
Fund.

  Except as indicated below and set forth below under
"Certain Provisions of
the Articles of Incorporation and Market Discount--Anti-
Takeover Provisions"
or except as expressly required by applicable law or
expressly set forth in
the designation of rights and preferences with respect to
any preferred stock,
the holders of preferred stock would have no voting rights.

  Holders of preferred stock, voting as a class, would at
all times be enti-
tled to elect two of the Fund's directors. In addition,
under the 1940 Act, if
at any time distributions on the Fund's preferred stock were
to be unpaid in
an amount equal to two full years' distributions thereon,
the holders of all
outstanding preferred stock, voting as a class, would be
entitled to elect a
majority of the Fund's directors until all distributions in
default have been
paid or declared and set apart for payment.

  The affirmative vote of the holders of a majority of the
outstanding pre-
ferred stock voting as a class, would be required to amend,
alter or repeal
any of the

50
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

DESCRIPTION OF SHARES (CONTINUED)

preferences, rights or powers of holders of preferred stock
so as to affect
materially and adversely such preferences, rights or powers,
or increase or
decrease the number of preferred stock authorized to be
issued. Unless a higher
percentage is required as described under "Anti-Takeover
Provisions," the affir-
mative vote of the holders of a majority of the outstanding
preferred stock,
voting as a class, would be required to approve any plan of
reorganization
adversely affecting such shares or any action requiring a
vote of security
holders under Section 13(a) of the 1940 Act including, among
other things,
changes in the Fund's investment objective or changes in the
investment
restrictions described above under "Investment
Restrictions".

  The Fund has no present intention of offering additional
Common Stock or any
preferred stock. Other offerings of its Common Stock, if
made, will require
approval of the Fund's Board of Directors. Any additional
offering will be sub-
ject to the requirements of the 1940 Act that such Common
Stock may not be
issued at a price below the then current net asset value,
exclusive of under-
writing discounts and commissions, except in connection with
an offering to
existing shareholders or with the consent of the holders of
a majority of the
Fund's outstanding voting securities.

CERTAIN PROVISIONS OF THE ARTICLES OF INCORPORATION AND
MARKET DISCOUNT


 ANTI-TAKEOVER PROVISIONS

  The Fund presently has provisions in its Articles of
Incorporation and Bylaws
(commonly referred to as "anti-takeover" provisions) which
may have the effect
of limiting the ability of other entities or persons to
acquire control of the
Fund, to cause it to engage in certain transactions or to
modify its structure.

  The Board of Directors is classified into three classes,
each with a term of
three years with only one class of directors standing for
election in any year.
Such classification may prevent replacement of a majority of
the directors for
up to a two year period. Directors may be removed from
office only for cause by
vote of at least 75% of the shares entitled to be voted on
the matter. In addi-
tion, unless 70% of the Board of Directors approves the
transaction, the affir-
mative vote of the holders of at least 75% of the shares
will be required to
authorize the Fund's conversion from a closed-end to an open-
end investment
company, or generally to authorize any of the following
transactions: (i) merg-


51
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

CERTAIN PROVISIONS OF THE ARTICLES OF INCORPORATION AND
MARKET DISCOUNT
(CONTINUED)

er, consolidation or share exchange of the Fund with or into
any other corpo-
ration; (ii) dissolution or liquidation of the Fund; (iii)
sale, lease,
exchange or other disposition of all or substantially all of
the assets of the
Fund; (iv) change in the nature of the business of the Fund
so that it would
cease to be an investment company registered under the 1940
Act; or (v) sale,
lease or exchange to the Fund, in exchange for securities of
the Fund, of any
assets of any entity or person (except assets having an
aggregate fair market
value of less than $1,000,000). The affirmative vote of at
least 75% of the
shares will be required to amend the Articles of
Incorporation or Bylaws to
change any of the foregoing provisions.

  The percentage votes required under these provisions,
which are greater than
the minimum requirements under Maryland law or the 1940 Act,
will make more
difficult a change in the Fund's business or management and
may have the
effect of depriving shareholders of an opportunity to sell
shares at a premium
over prevailing market prices by discouraging a third party
from seeking to
obtain control of the Fund in a tender offer or similar
transaction. The
Fund's Board of Directors, however, has considered these
antitakeover provi-
sions and believes they are in the best interests of
shareholders.

MARKET DISCOUNT

  Shares of common stock of closed-end investment companies
frequently trade
at a discount from net asset value, or in some cases trade
at a premium.
Shares of closed-end investment companies investing
primarily in fixed income
securities tend to trade on the basis of income yield on the
market price of
the shares and the market price may also be affected by
trading volume, gen-
eral market conditions and economic conditions and other
factors beyond the
control of the Fund. As a result, the market price of the
Fund's shares may be
greater or less than the net asset value. From March 12,
1993 through March 1,
1996, the Fund's shares have traded from a premium of 4.66%
to a market dis-
count of (10.44%).

  Some closed-end companies have taken certain actions,
including the repur-
chase of common stock in the market at market prices and the
making of one or
more tender offers for common stock at net asset value, in
an effort to reduce
or mitigate the discount, and others have converted to an
open-end investment
company, the shares of which are redeemable at net asset
value.

52
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

CERTAIN PROVISIONS OF THE ARTICLES OF INCORPORATION AND
MARKET DISCOUNT
(CONTINUED)


  The Fund's Board of Directors has seen no reason to adopt
any of the steps,
which some other closed-end funds have used to address the
discount. In addi-
tion, the experience of many closed-end funds suggests that
the effect of many
of these steps (other than open-ending) on the discount may
be temporary or
insignificant. Accordingly, there can be no assurance that
any of these actions
will be taken or, if undertaken, will cause the Fund's
shares to trade at a
price equal to their net asset value.

CUSTODIAN, TRANSFER, AND DIVIDEND-PAYING AGENT, REGISTRAR
AND PLAN AGENT


  PNC Bank, located at 17th and Chestnut Streets,
Philadelphia, Pennsylvania
19103, is the custodian of the Fund and has custody of all
securities and cash
of the Fund. The custodian, among other things, attends to
the collection of
principal and income, and payment for any collection of
proceeds of securities
bought and sold by the Fund. First Data, located at One
Exchange Place, Boston,
Massachusetts 02109, serves as the Fund's transfer agent,
dividend-paying agent
and registrar. First Data also serves as agent in connection
with the Plan.

REPORTS TO SHAREHOLDERS


  The Fund sends unaudited quarterly and audited annual
reports to the holders
of its securities, including a list of investments held.

EXPERTS


  The audited financial statements incorporated into this
Prospectus have been
so included in reliance on the report of KPMG Peat Marwick
LLP, independent
auditors, given on the authority of said firm as experts in
auditing and
accounting.


53
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

ADDITIONAL INFORMATION


  This Prospectus does not contain all of the information
set forth in the
Registration Statement filed with the SEC. The complete
Registration Statement
may be obtained from the SEC upon payment of the fee
prescribed by its Rules
and Regulations.

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

  No person has been authorized to give any information or
to make any repre-
sentations not contained in this Prospectus and, if given or
made, the infor-
mation or representations must not be relied upon as having
been authorized by
the Fund, the Investment Manager or Smith Barney. This
Prospectus does not
constitute an offer to sell or a solicitation of an offer to
buy any security
other than the shares of Common Stock offered by this
Prospectus, nor does it
constitute an offer to sell or a solicitation of an offer to
buy the shares of
Common Stock by anyone in any jurisdiction in which the
offer or solicitation
would be unlawful. Neither the delivery of this Prospectus
nor any sale made
hereunder will, under any circumstances, create any
implication that there has
been no change in the affairs of the Fund since the date of
this Prospectus.
If any material change occurs while this Prospectus is
required by law to be
delivered, however, this Prospectus will be supplemented or
amended according-
ly.

54
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

APPENDIX A

                 DESCRIPTION OF MOODY'S, S&P AND FITCH
RATINGS

  DESCRIPTION OF MOODY'S MUNICIPAL BOND RATINGS:

    AAA--Bonds that are rated Aaa are judged to be of the
best quality, carry
the smallest degree of investment risk and are generally
referred to as "gilt
edge." Interest payments with respect to these bonds are
protected by a large
or by an exceptionally stable margin, and principal is
secure. Although the
various protective elements applicable to these bonds are
likely to change,
those changes are most unlikely to impair the fundamentally
strong position of
these bonds.

    AA--Bonds that are rated Aa are judged to be of high
quality by all stan-
dards and together with the Aaa group comprise what are
generally known as high
grade bonds. They are rated lower than the best bonds
because margins of pro-
tection may not be as large as in Aaa securities, or
fluctuation of protective
elements may be of greater amplitude, or other elements may
be present that
make the long-term risks appear somewhat larger than in Aaa
securities.

    A--Bonds that are rated A possess many favorable
investment attributes and
are to be considered as upper medium grade obligations.
Factors giving security
to principal and interest with respect to these bonds are
considered adequate,
but elements may be present that suggest a susceptibility to
impairment some-
time in the future.

    BAA--Bonds rated Baa are considered to be medium grade
obligations, that is
they are neither highly protected nor poorly secured.
Interest payment and
principal security appear adequate for the present but
certain protective
elements may be lacking or may be characteristically
unreliable over any great
length of time. These bonds lack outstanding investment
characteristics and may
have speculative characteristics as well.

    Moody's applies the numerical modifiers 1, 2 and 3 in
each generic rating
classification from Aa through B. The modifier 1 indicates
that the security
ranks in the higher end of its generic rating category; the
modifier 2 indi-
cates a mid-range ranking; and the modifier 3 indicates that
the issue ranks in
the lower end of its generic rating category.


A-1
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

APPENDIX A (CONTINUED)


  DESCRIPTION OF MOODY'S MUNICIPAL NOTE RATINGS:

    Moody's ratings for state and municipal notes and other
short-term loans
are designated Moody's Investment Grade (MIG) and for
variable demand obliga-
tions are designated Variable Moody's Investment Grade
(VMIG). This distinc-
tion recognizes the differences between short-term credit
risk and long-term
risk. Loans bearing the designation MIG 1/VMIG 1 are of the
best quality,
enjoying strong protection from established cash flows of
funds for their ser-
vicing or from established and broad-based access to the
market for refinanc-
ing, or both. Loans bearing the description MIG 2/VMIG 2 are
of high quality,
with margins of protection ample, although not as large as
the preceding
group. Loans bearing the designation MIG 3/VMIG 3 are of
favorable quality,
with all security elements accounted for but lacking the
undeniable strength
of the preceding grades. Market access for refinancing, in
particular, is
likely to be less well established.

  DESCRIPTION OF MOODY'S COMMERCIAL PAPER RATINGS:

    The rating Prime-1 is the highest commercial paper
rating assigned by
Moody's. Issuers rated Prime-1 (or related supporting
institutions) are con-
sidered to have a superior capacity for repayment of short-
term promissory
obligations. Issuers rates Prime-2 (or related supporting
institutions) are
considered to have a strong capacity for repayment of short-
term promissory
obligations, normally evidenced by many of the
characteristics of issuers
rated Prime-1 but to a lesser degree. Earnings trends and
coverage ratios,
while sound, will be more subject to variation.
Capitalization characteris-
tics, while still appropriate, may be more affected by
external conditions.
Ample alternative liquidity is maintained.

  DESCRIPTION OF S&P MUNICIPAL BOND RATINGS:

    AAA--These bonds are the obligations of the higher
quality and have the
strongest capacity for timely payment of debt service.

    GENERAL OBLIGATION BONDS RATED AAA--In a period of
economic stress, the
issuers of these bonds will suffer the smallest declines in
income and will be
least susceptible to autonomous decline. Debt burden is
moderate. A strong
revenue structure appears more than adequate to meet future
expenditure
requirements. Quality of management appears superior.

A-2
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

APPENDIX A (CONTINUED)


    REVENUE BONDS RATED AAA--Debt service coverage with
respect to these bonds
has been, and is expected to remain, substantial. Stability
of the pledged
revenues is also exceptionally strong due to the competitive
position of the
municipal enterprise or to the nature of the revenues. Basic
security provi-
sions (including rate covenant, earnings test for issuance
of additional
bonds, debt service reserve requirements) are rigorous.
There is evidence of
superior management.

    AA--The investment characteristics of bonds in this
group are only
slightly less marked than those of the prime quality issues.
Bonds rated AA
have the second strongest capacity for payment of debt
service.

    A--Principal and interest payments on bonds in this
category are regarded
as safe although the bonds are somewhat more susceptible to
the adverse
effects of changes in circumstances and economic conditions
than bonds in
higher rated categories. This rating describes the third
strongest capacity
for payment of debt service.

    GENERAL OBLIGATION BONDS RATED A--There is some
weakness, either in the
local economic base, in debt burden, in the balance between
revenues and
expenditures, or in quality of management. Under certain
adverse circumstanc-
es, any one such weakness might impair the ability of the
issuer to meet debt
obligations at some future date.

    REVENUE BONDS RATED A--Debt service coverage is good,
but not exceptional.
Stability of the pledged revenues could show some variations
because of
increased competition or economic influences on revenues.
Basic security pro-
visions, while satisfactory, are less stringent. Management
performance
appearance appears adequate.

    BBB--The bonds in this group are regarded as having an
adequate capacity
to pay interest and repay principal. Whereas bonds in this
group normally
exhibit adequate protection parameters, adverse economic
conditions or chang-
ing circumstances are more likely to lead to a weakened
capacity to pay inter-
est and repay principal for debt in this category than in
higher rated catego-
ries. Bonds rated BBB have the fourth strongest capacity or
payment of debt
service.

    S&P's letter ratings may be modified by the addition of
a plus or a minus
sign, which is used to show relative standing within the
major rating catego-
ries, except in the AAA category.


A-3
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

APPENDIX A (CONTINUED)


  DESCRIPTION OF S&P MUNICIPAL NOTE RATINGS:

    Municipal notes with maturities of three years or less
are usually given
note ratings (designated SP-1, -2 or -3) to distinguish more
clearly the
credit quality of notes as compared to bonds. Notes rated SP-
1 have a very
strong or strong capacity to pay principal and interest.
Those issues deter-
mined to possess overwhelming safety characteristics are
given the designation
of SP-1+. Notes rated SP-2 have a satisfactory capacity to
pay principal and
interest.

  DESCRIPTION OF S&P COMMERCIAL PAPER RATINGS:

    Commercial paper rated A-1 by S&P indicates that the
degree of safety
regarding timely payment is either overwhelming or very
strong. Those issues
determined to possess overwhelming safety characteristics
are denoted A-1+.
Capacity for timely payment on commercial paper rated A-2 is
strong, but the
relative degree of safety is not as high as for issues
designated A-1.

  DESCRIPTION OF FITCH MUNICIPAL BOND RATINGS:

    AAA--Bonds rated AAA by Fitch are considered to be
investment grade and of
the highest credit quality. The obligor has an exceptionally
strong ability to
pay interest and repay principal, which is unlikely to be
affected by reason-
ably foreseeable events.

    AA--Bonds rated AA by Fitch are considered to be
investment grade and of
very high credit quality. The obligor's ability to pay
interest and repay
principal is very strong, although not quite as strong as
bonds rated AAA.
Because bonds rated in the AAA and AA categories are not
significantly vulner-
able to foreseeable future developments, short-term debt of
these issues is
generally rated F-1+ by Fitch.

    A--Bonds rated A by Fitch are considered to be
investment grade and of
high credit quality. The obligor's ability to pay interest
and repay principal
is considered to be strong, but may be more vulnerable to
adverse changes in
economic conditions and circumstances than bonds with higher
ratings.

    BBB--Bonds rated BBB by Fitch are considered to be
investment grade and of
satisfactory credit quality. The obligor's ability to pay
interest and repay
principal is considered to be adequate. Adverse changes in
economic conditions
and circumstances, however, are more likely to have adverse
consequences on
these bonds, and therefore impair timely payment. The
likelihood that the

A-4
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

APPENDIX A (CONTINUED)

ratings of these bonds will fall below investment grade is
higher than for
bonds with higher ratings.

    Plus and minus signs are used by Fitch to indicate the
relative position of
a credit within a rating category. Plus and minus signs,
however, are not used
in the AAA category.

 DESCRIPTION OF FITCH SHORT-TERM RATINGS:

    Fitch's short-term ratings apply to debt obligations
that are payable on
demand or have original maturities of generally up to three
years, including
commercial paper, certificates of deposit, medium-term
notes, and municipal and
investment notes.

    The short-term rating places greater emphasis than a
long-term rating on
the existence of liquidity necessary to meet the issuer's
obligations in a
timely manner.

    Fitch's short-term ratings are as follows:

    F-1+--Issues assigned this rating are regarded as having
the strongest
degree of assurance for timely payment.

    F-1--Issues assigned this rating reflect an assurance of
timely payment
only slightly less in degree than issues rated F-1+.

    F-2--Issues assigned this rating have a satisfactory
degree of assurance
for timely payment but the margin of safety is not as great
as for issues
assigned F-1+ and F-1 ratings.

    F-3--Issues assigned this rating have characteristics
suggesting that the
degree of assurance for timely payment is adequate, although
near-term adverse
changes could cause these securities to be rated below
investment grade.

    LOC--The symbol LOC indicates that the rating is based
on a letter of
credit issued by a commercial bank.


A-5
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

APPENDIX B

                              OPTIONS AND FUTURES

    GENERAL. The Fund may engage in futures and options
transactions in accor-
dance with its investment objective and policies. The Fund
may engage in such
transactions if it appears advantageous to the Investment
Manager to do so in
order to pursue its investment objective, to hedge against
the effects of mar-
ket conditions and to stabilize the value of its assets. The
Investment Manager
may also decide not to engage in any of these investment
practices. The use of
futures and options, and the possible benefits and attendant
risks are dis-
cussed below, along with information concerning certain
other investment poli-
cies and techniques.

    FINANCIAL FUTURES CONTRACTS. The Fund may enter into
financial futures con-
tracts for the future delivery of a financial instrument,
such as a security,
or the cash value of a securities index. This investment
technique is designed
primarily to hedge (i.e., protect) against anticipated
future changes in market
conditions which otherwise might adversely affect the value
of securities which
the Fund holds or intends to purchase. A "sale" of a futures
contract means the
undertaking of a contractual obligation to deliver the
securities, or the cash
value of an index, called for by the contract at a specified
price during a
specified delivery period. A "purchase" of a futures
contract means the under-
taking of a contractual obligation to acquire the
securities, or cash value of
an index, at a specified price during a specified delivery
period. At the time
of delivery, in the case of fixed income securities pursuant
to the contract,
adjustments are made to recognize differences in value
arising from the deliv-
ery of securities with a different interest rate than that
specified in the
contract. In some cases, securities called for by a futures
contract may not
have been issued at the time the contract was written.

    Although some financial futures contracts by their terms
call for the
actual delivery or acquisition of securities, in most cases
the contractual
commitment is closed out before delivery without having to
make or take deliv-
ery of the security. The offsetting of a contractual
obligation is accomplished
by purchasing (or selling, as the case may be) on a
commodities exchange an
identical futures contract calling for delivery in the same
period. Such a
transaction cancels the obligation to make or take delivery
of the securities.
All transactions in the futures market are made, offset or
fulfilled through a
clearing house associated with the exchange on which the
contracts are traded.
The Fund will incur brokerage fees when it purchases or
sells contracts, and
will be required to maintain margin deposits. Futures
contracts entail risk. If
the Investment Manager's


B-1
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

APPENDIX B (CONTINUED)

judgment about the general direction of securities markets
or interest rates
is wrong, the Fund's overall performance may be poorer than
if the Fund had
not entered into such contracts.

    There may be an imperfect correlation between movements
in prices of
futures contracts and portfolio securities being hedged. In
addition, the mar-
ket prices of futures contracts may be affected by certain
factors. If partic-
ipants in the futures market elect to close out their
contracts through off-
setting transactions rather than meet margin requirements,
distortions in the
normal relationship between the securities and futures
markets could result.
Price distortions could also result if investors in futures
contracts decide
to make or take delivery of underlying securities rather
than engage in clos-
ing transactions due to the resultant reduction in the
liquidity of the
futures market. In addition, because from the point of view
of speculators,
the margin requirements in the futures market may be less
onerous than margin
requirements in the cash market, increased participation by
speculators in the
futures market could cause temporary price distortions. Due
to the possibility
of price distortions in the futures market and because of
the imperfect corre-
lation between movements in the prices of securities and
movements in the
prices of futures contracts, a correct forecast of market
trends by the
Investment Manager may still not result in a successful
hedging transaction.
If this should occur, the Fund could lose money on the
financial futures con-
tracts and also on the value of its portfolio securities.

    OPTIONS ON FINANCIAL FUTURES CONTRACTS. The Fund may
purchase and write
call and put options on financial futures contracts. An
option on a futures
contract gives the purchaser the right, in return for the
premium paid, to
assume a position in a futures contract at a specified
exercise price at any
time during the period specified in the terms of the option.
Upon exercise,
the writer of the option delivers the futures contract to
the holder at the
exercise price. The Fund would be required to deposit with
its custodian ini-
tial margin and maintenance margin with respect to put and
call options on
futures contracts written by it. Options on futures
contracts involve risks
similar to those risks relating to transactions in financial
futures contracts
described above. Also, an option purchased by the Fund may
expire worthless,
in which case the Fund would lose the premium paid therefor.

    OPTIONS ON SECURITIES. The Fund may write covered call
options so long as
it owns securities which are acceptable for escrow purposes
and may write
secured put options, which means that so long as the Fund is
obligated as

B-2
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

APPENDIX B (CONTINUED)

a writer of a put option, it will invest an amount, not less
than the exercise
price of the put option, in securities consistent with the
Fund's investment
objective and policies and restrictions on investment. See
"Investment Objec-
tive and Management Policies" and "Investment Restrictions."
A call option
gives the purchaser the right to buy, and the writer the
obligation to sell,
the underlying security at the exercise price during the
period specified in
the terms of the option. A put option gives the purchaser
the right to sell,
and the writer the obligation to buy, the underlying
security at the exercise
price during the period specified in the terms of the
option. The premium
received for writing an option will reflect, among other
things, the current
market price of the underlying security, the relationship of
the exercise
price to the market price, the price volatility of the
underlying security,
the option period, supply and demand and interest rates. The
Fund may write or
purchase spread options, which are options for which the
exercise price may be
a fixed dollar spread or yield spread between the security
underlying the
option and another security that is used as a benchmark. The
exercise price of
an option may be below, equal to or above the current market
value of the
underlying security at the time the option is written. The
buyer of a put who
also owns the related security is protected by ownership of
a put option
against any decline in that security's price below the
exercise price, less
the amount paid for the option. At times the Fund may wish
to establish a
position in a security upon which call options are
available. By purchasing a
call option on such security the Fund would be able to fix
the cost of acquir-
ing the security, this being the cost of the call plus the
exercise price of
the option. This procedure also provides some protection
from an unexpected
downturn in the market, because the Fund is only at risk for
the amount of the
premium paid for the call option which it can, if it
chooses, permit to
expire.

    OPTIONS ON SECURITIES INDICES. The Fund also may
purchase and write call
and put options on securities indices. Through the writing
or purchase of
index options, the Fund can achieve many of the same
objectives as through the
use of options on individual securities. Options on
securities indices are
similar to options on a security except that, rather than
the right to take or
make delivery of a security at a specified price, an option
on a securities
index gives the holder the right to receive, upon exercise
of the option, an
amount of cash, if the closing level of the securities index
upon which the
option is based is greater than, in the case of a call, or
less than, in the
case of a put, the exercise price of the option. This amount
of cash is equal
to the difference between the closing price of the index and
the exercise
price of the option. The writer of the option is obligated,
in return for the
premium received, to make delivery of this amount. Unlike
options on securi-
ties (which require, upon exercise, delivery of


B-3
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

APPENDIX B (CONTINUED)

the underlying security), settlements of options on
securities indices, upon
exercise thereof, are in cash, and the gain or loss of an
option on an index
depends on price movements in the market generally (or in a
particular indus-
try or segment of the market on which the underlying index
base) rather than
price movements in individual securities, as is the case
with respect to
options on securities.

    When the Fund writes an option on a securities index, it
will be required
to deposit with its custodian eligible securities equal in
value to 100% of
the exercise price in the case of a put, or the contract's
value in the case
of a call. In addition, where the Fund writes a call option
on a securities
index at a time when the contract value exceeds the exercise
price, the Fund
will segregate, until the option expires or is closed out,
cash or cash equiv-
alents equal in value to such excess.

    Options on securities and index options involve risks
similar to those
risks relating to transactions in financial futures
described above. Also, an
option purchased by the Fund may expire worthless, in which
case the Fund
would lose the premium paid therefor.

    OVER-THE-COUNTER OPTIONS. As previously indicated in
this Prospectus (see
"Investment Objectives and Management Policies--Investment
Techniques"), the
Fund may deal in OTC options. The Fund understands the
position of the staff
of the SEC to be that purchased OTC options and the assets
used as "cover" for
written OTC options are illiquid securities. The Fund and
the Investment Man-
ager disagree with this position and have found the dealers
with which they
engage in OTC options transactions generally agreeable to
and capable of
entering into closing transactions. The Fund has adopted
procedures for engag-
ing in OTC options for the purpose of reducing any potential
adverse impact of
such transactions upon the liquidity of the Fund's
portfolio.

    As part of these procedures the Fund will only engage in
OTC options
transactions with respect to U.S. government securities with
primary dealers
that have been specifically approved by the Board of
Directors of the Fund.
The Fund will engage in OTC options transactions with
respect to municipal
securities only with dealers that have been specifically
approved by the Board
of Directors. The Fund and its Investment Manager believe
that the approved
dealers should be agreeable and able to enter into closing
transactions as
necessary and, therefore, present minimal credit risks to
the Fund. The Fund
anticipates entering into written agreements with those
dealers to whom the
Fund may sell OTC options, pursuant to which the Fund would
have the absolute
right to repur-

B-4
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

APPENDIX B (CONTINUED)

chase the OTC options from such dealers at any time at a
price with respect to
U.S. Government securities determined pursuant to a formula
set forth in cer-
tain no action letters published by the SEC staff. The Fund
will not engage in
OTC options transactions if the amount invested by the Fund
in OTC options,
plus, with respect to OTC options written by the Fund, the
amounts required to
be treated as illiquid pursuant to the terms of such letters
(and the value of
the assets used as cover with respect to OTC option sales
which are not within
the scope of such letters), plus the amount invested by the
Fund in illiquid
securities, would exceed 25% of the Fund's total assets. OTC
options on securi-
ties other than U.S. Government securities, including
options on municipal
securities, may not be within the scope of such letters and,
accordingly, the
amount invested by the Fund in OTC options on such other
securities and the
value of the assets used as cover with respect to OTC
options sales regarding
such non-U.S. Government securities will be treated as
illiquid and subject to
the 25% limitation on the Fund's assets which may be
invested in illiquid secu-
rities.

    REGULATORY RESTRICTIONS. To the extent required to
comply with applicable
SEC releases and staff positions, when purchasing a futures
contract or writing
a put option, the Fund will maintain, in a segregated
account, cash or liquid
high-grade securities equal to the value of such contracts.

    The Fund will not enter into a futures contract or
purchase an option
thereon if immediately thereafter the initial margin
deposits for futures con-
tracts held by the Fund plus premiums paid by it for open
options on futures
would exceed 5% of the fair market value of the Fund's total
assets after tak-
ing into account unrealized profits and unrealized losses on
any such con-
tracts. The Fund will not engage in transactions in
financial futures contracts
or options thereon for speculation, but only to attempt to
hedge against
changes in market conditions affecting the values of
securities which the Fund
holds or intends to purchase.

    ACCOUNTING AND TAX CONSIDERATIONS. When the Fund writes
an option, an
amount equal to the premium received by it is included in
the Fund's Statement
of Assets and Liabilities as a liability. The amount of the
liability is subse-
quently marked to market to reflect the current market value
of the option
written. When the Fund purchases an option, the premium paid
by the Fund is
recorded as an asset and is subsequently adjusted to the
current market value
of the option.

    In the case of a regulated futures contract purchased or
sold by the Fund,
an amount equal to the initial margin deposit is recorded as
an asset. The


B-5
<PAGE>

Smith Barney Intermediate Municipal Fund, Inc.

APPENDIX B (CONTINUED)

amount of the asset is subsequently adjusted to reflect
changes in the amount
of the deposit as well as changes in the value of the
contract.

    Certain listed options and futures contracts are
considered "section 1256
contracts" for Federal income tax purposes. In general, gain
or loss realized
by the Fund on section 1256 contracts will be considered 60%
long term and 40%
short term capital gain or loss. Also, section 1256
contracts held by the Fund
at the end of each taxable year (and at October 31 for
purposes of calculating
the excise tax) will be "marked to market", that is, treated
for Federal
income tax purposes as though sold for fair market value on
the last business
day of such taxable year. The Fund can elect to exempt its
section 1256 con-
tracts which are part of a "mixed straddle" (as described
below) from the
application of section 1256.

    Gain or loss realized by the Fund upon the expiration or
sale of certain
over-the-counter put and call options held by the Fund will
be either long
term or short term capital gain or loss depending upon the
Fund's holding
period with respect to such option. However, gain or loss
realized upon the
expiration or closing out of such options that are written
by the Fund will be
treated as short term capital gain or loss. In general, if
the Fund exercises
an option, or an option that the Fund has written is
exercised, gain or loss
on the option will not be separately recognized, but the
premium received or
paid will be included in the calculation of gain or loss
upon disposition of
the property underlying the option.

    Any security, option or futures contract, delayed
delivery transaction, or
other position entered into or held by the Fund in
conjunction with any other
position held by the Fund may constitute a "straddle" for
Federal income tax
purposes. A straddle of which at least one, but not all, the
positions are
section 1256 contracts will constitute a "mixed straddle".
In general, strad-
dles are subject to certain rules that may affect the
character and timing of
the Funds' gains and losses with respect to straddle
positions by requiring,
among other things, that loss realized on disposition of one
position of a
straddle be deferred to the extent of any unrealized gain in
an offsetting
position until such position is disposed of; that the Fund's
holding period in
certain straddle positions not begin until the straddle is
terminated (possi-
bly resulting in gain being treated as short term capital
gain rather than
long term capital gain); and that losses recognized with
respect to certain
straddle positions, that otherwise constitute short term
capital losses, be
treated as long term capital losses. Different elections are
available to the
Fund which may mitigate the effects of the straddle rules,
particularly with
respect to mixed straddles.

B-6
<PAGE>

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

     SMITH BARNEY
     ------------

       A Member of TravelersGroup[ART]




     Smith
     Barney
     Intermediate
     Municipal
     Fund, Inc.

     COMMON STOCK

     388 Greenwich Street New York, New York 10013

     FD[    ]     3/96








                            PART C
                     OTHER INFORMATION



Item    24    .  Financial Statements and Exhibits.

     (1)  Financial Statements
         
     Parts A and B

          (a)  Financial Highlights

             (b)    The Registrants Annual Report for the
     period ended December 31, 1995 and the Independent
     Auditors Report are incorporated by reference to the
     definitive 30b-2 filed on February 22, 1996 as
     accession number 0000091155-96-000087.

     Part C
          None

               (2)  Exhibits:

                    Exhibit
                    Number              Description

                    (a)(1)              Articles of
              Incorporation of Registrant*
                        (2)             Amended Articles
of
              Incorporation of Registrant*
                    (b)            By-Laws.*
                    (c)            Not Applicable.
                    (d)            Form of Specimen
               Certificate representing shares of
                                   Common Stock, par
               value $.001 per share**
                    (e)            Registrants Dividend
               Reinvestment Plan (filed herewith)
                    (f)            Not Applicable
                    (g)(1)              Form of Investment
               Management Agreement.**
                        (2)             Form of Transfer
and
               Assumption of Investment
                                   Management Agreement
               between Registrant, Mutual
                                   Management Corp and
               Smith Barney Mutual Funds
                                   Management Inc. (filed
               herewith)
                    (h)            Form of Underwriting
               Agreement.**
                    (i)            Not Applicable.
                    (j)            Form of Custodian
               Services Agreement.**
                    (k)            Form of Transfer
Agency
               and Registrar Agreement
                                   (filed herewith)
                    (l)(1)              Opinion and
                    consent
                of Sullivan & Cromwell.**
                        (2)             Opinion and
consent
                of Sullivan & Cromwell.**
                    (m)            Not Applicable
                    (n)            Consent of KPMG Peat
              Marwick LLP (filed herewith)
                    (o)            Not Applicable.
                    (p)            Not
Applicable.
                    (q)            Not
Applicable.
                    (r)            Financial Data Schedule
               (filed herewith)    


             * Previously filed. by Registrant with its
          initial Registration Statement (No. 33-44639) on
          December 19, 1991
                **  Previously filed by Registrant with
               PreEffective Amendment No. 3 to its
               Registration
          Statement (No. 33-44639) on February 27, 1992


Item    25.      Marketing Arrangements.

        Reference is made to the Underwriting Agreement,
filed as Exhibit (h) by Registrant with Pre-Effective
Amendment No. 3 to its Registration Statement .    

Item    26.      Other Expense of Issuance and
Distribution.

   The following table sets forth the estimated expenses
to be incurred in connection with the offering described
in this Registration Statement:
   
Securities and Exchange Commission registration      $ 0
fees
National Association of Securities Dealers, Inc.       0
fee
American Stock Exchange listing fee                    0
Blue Sky fees and expenses                             0
Costs of Stock Certificates                            0
Printing                                            5,000
Legal fees and expenses                                0
Independent Auditors' fees and expenses                0
Miscellaneous                                          0_
                                           Total   $5,000

    


Item    27.      Persons Controlled by or Under Common
Control.

        None    
Item    28.      Number of Holders of Securities.

     The number of record holders of Registrant as of
   March 8,1996     is as follows:

               (1)                                (2)
     Title of Class                     Number of Record
     Holders Shares of Common Stock, par
        173     value $.001 per share
     
     
Item    29.      Indemnification.

     Under Registrant's Articles of Incorporation, the
directors and officers of Registrant will be indemnified to
the fullest extent allowed and in the manner provided by
Maryland law and applicable provisions of the Investment
Company Act of 1940, as amended (the 1940 Act),  including
advancing of expenses incurred in connection therewith.
Indemnification shall not be provided however to any officer
or director against any liability to the Registrant or its
security holders to which he or she would otherwise be
subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in
the conduct of his or her office.

     Article 2, Section 405.2 of the Maryland General
Corporation Law provides that the Articles of
Incorporation of a Maryland corporation may limit the
extent to which directors or officers may be personally
liable to the Corporation or its shareholders for money
damages in certain instances.  The Registrant's Articles
of Incorporation provide that, to the fullest extent
permitted by Maryland law, as it may be amended or
interpreted from time to time, no director or officer of
the Registrant shall be personally liable to the
Registrant or its shareholders. The Registrant's Articles
of Incorporation also provide that no amendment of the
Registrant's Articles of Incorporation or repeal of any of
its provisions shall limit or eliminate any of the
benefits provided to directors and officers in respect of
any act or omission that occurred prior to such amendment
or repeal.

     Insofar as indemnification for liabilities under the
1933 Act may be permitted to the directors and officers,
the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in such Act and is
therefore unenforceable. If a claim for indemnification
against such liabilities under the 1933 Act (other than
for expenses incurred in a successful defense) is asserted
against the Fund by the directors or officers in
connection with the Common Shares, the Registrant will,
unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate
jurisdiction the question of whether such indemnification
by it is against public policy as expressed in such Act
and will be governed by the final adjudication of such
issue.
Item 30.  Business and other Connections of Investment
Manager.

        Smith Barney Mutual Funds Management Inc.
(SBMFM) was incorporated in 1968 and is a wholly owned
subsidiary of Smith Barney Holdings Inc. (Holdings),
which is in turn a wholly owned subsidiary of Travelers
Group Inc. (Travelers). For additional information, see
Management of the Fund in the Prospectus.
     The list required by this Item 30 of officers and
directors of SBMFM, together with information as to any
other business, profession, vocation or  employment of a
substantial nature engaged in by such officers and
directors during the past five fiscal years, is
incorporated by reference to Schedules A and D of FORM ADV
filed by SBMFM pursuant to the Advisers Act (SEC File No.
801-8314).    


Item    31.      Location of Accounts and Records.

        Each Person maintaining physical possession of
accounts, books and other documents of the Registrant
required to be maintained pursuant to Section 31(a) of the
1940 Act, is listed below:

          (1)  Smith Barney Mutual Funds Management Inc.
               388 Greenwich Street
               New York, New York 10013
          (2)  PNC Bank, National Association
              17th and Chestnut Streets
               Philadelphia, Pennsylvania 19103.

          (3)  First Data Investor Services Group,
               Inc. Exchange Place
               Boston, Massachusetts 02109    


Item    32.      Management Services.

        Not Applicable.    

Item    33.      Undertakings.

        (1) Not Applicable.    

     (2) Not Applicable.

     (3) Not Applicable.

         (4)(a)       The  Registrant  undertakes  to
file, during any period in which offers or sales are being
made, a Post-Effective Amendment to the Registration
Statement:


          (1)  to include any prospectus required by
Section 10(a)(3) of the 1933 Act;


           (2)   to  reflect in the prospectus any facts
or events   after   the  effective  date  of  the
Registration
Statement  (or  the  most  recent  Post-Effective
Amendment thereof)  which, individually or in the
aggregate, represent a  fundamental  change in the
formation  set  forth  in  the Registration Statement; and
           (3)   to  include  any material information
with respect to the plan of distribution not previously
disclosed in  this  Registration Statement or any material
change  to such information in this Registration
Statement.
      (4)(b)     Registrant undertakes that, for the
purpose of  determining  any  liability under  the  1933
Act,  each subsequent Post-Effective Amendment shall be
deemed to be  a new               Registration  Statement
relating  to  the  securities
offered  therein,  and the offering of those  securities

at that  time  shall  be  deemed to be the  initial  bona

fide offering thereof.

     (4)(c)    Not Applicable.

     (5)  Not Applicable.

     (6)  Not Applicable.    

                        SIGNATURES

      Pursuant to the requirements of the Securities Act
of 1933, as amended, and the Investment Company Act of
1940, as amended,  the Registrant has duly caused this
Post-Effective Amendment No. 1 to its Registration
Statement on Form N-2 to be  signed on its behalf by the
undersigned, thereunto  duly authorized, in the City of
New York, State of New  York,  on the    22nd day of
March, 1996.    


                                  
                                  SMITH BARNEY
                                  INTERMEDIATE
                                  MUNICIPAL FUND, INC.
                                       By   /s/   HEATH
B.
MCLENDON
                                  Heath B. McLendon
                                  Chairman of the Board
                                  and
                                            Chief
                                            Executive
Officer    

      Pursuant to the requirements of the Securities Act
of 1933, as amended, this Post-Effective Amendment No. 1
to the Registration  Statement  has been signed  by  the
following persons in the capacities and on the dates
indicated:


signature           Title                         Date


   /s/ Heath B. McLendon           Chairman of the Board
and
Heath    B.    McLendon          Chief   Executive
     Officer March 22, 1996
     
     
/s/   Jessica   Bibliowicz         President  and
Director
March 22, 1996
Jessica Bibliowicz


/s/ Joseph H. Fleiss*         Director
March 22, 1996
Joseph H. Fleiss
/s/ Donald R. Foley*          Director
March 22, 1996
Donald R. Foley


____________________          Director
March 22, 1996
Paul Hardin


/s/ Francis P. Martin*        Director
March 22, 1996
Francis P. Martin


/s/ Roderick C. Rasmussen*    Director
March 22, 1996
Roderick C. Rasmussen

/s/ John P. Toolan*
Director
March 22, 1996
John P. Toolan


/s/ C. Richard Youngdahl*     Director
March 22, 1996
C. Richard Youngdahl


/s/ Lewis E. Daidone          Senior Vice President and
Lewis E. Daidone         Treasurer (Chief Financial
                    and Accounting Officer)
March 22, 1996    
*By:      /s/Lewis E. Daidone
     Lewis E. Daidone
     Pursuant to Power of Attorney.



             SMITH BARNEY MUNICIPAL FUND,
                       INC. EXHIBIT INDEX
                       
                       
Exhibit
Number
Description of Exhibit


          (e)                           Form   of
Dividend
Reinvestment Plan

     (g)(2)                          Form  of  Transfer
and
Assumption of
                         Investment Management Agreement

      (k)                         Form  of  Transfer
Agency
Agreement

     (n)                        Consent of KPMG Peat
Marwick
LLP

    (r)                       Financial Data Schedule
                         Cover Letter