AMENDED INVESTMENT ADVISORY AND SERVICE AGREEMENT


     THIS AGREEMENT,  dated and effective as of the 1st day of November 2004, is
made and entered into by and between  CAPITAL INCOME  BUILDER,  INC., a Maryland
corporation,   (hereinafter  called  the  "Fund"),   and  CAPITAL  RESEARCH  AND
MANAGEMENT COMPANY, a Delaware corporation,  (hereinafter called the "Investment
Adviser").


                               W I T N E S S E T H

     A.  The  Fund is an  open-end  non-diversified  investment  company  of the
management type,  registered under the Investment Company Act of 1940 (the "1940
Act"). The Investment Adviser is registered under the Investment Advisers Act of
1940 and is engaged in the business of providing investment advisory and related
services to the Fund and to other investment companies.

     B. The Investment Adviser has provided  investment advisory services to the
Fund since its  inception,  and is currently  providing  such services  under an
amended Investment  Advisory and Services Agreement dated September 22, 2003, as
renewed.

     NOW THEREFORE,  in consideration of the premises and the mutual undertaking
of the parties, it is covenanted and agreed as follows:

     1. The Investment  Adviser shall determine what securities and other assets
shall be purchased or sold by the Fund.

     2. The Investment  Adviser shall furnish the services of persons to perform
the executive, administrative,  clerical, and bookkeeping functions of the Fund,
including  the daily  determination  of net asset value and  offering  price per
share. The Investment  Adviser shall pay the compensation and travel expenses of
all such persons, and they shall serve without any additional  compensation from
the Fund.  The Investment  Adviser shall also, at its expense,  provide the Fund
with  necessary  office  space  (which may be in the  offices of the  Investment
Adviser);  all necessary  office  equipment and utilities;  and general  purpose
forms, supplies, and postage used at the offices of the Fund.

     3. The Fund  shall  pay all its  expenses  not  assumed  by the  Investment
Adviser as  provided  herein.  Such  expenses  shall  include,  but shall not be
limited to, custodian,  registrar,  stock transfer and dividend  disbursing fees
and expenses;  distribution  expenses pursuant to a plan under Rule 12b-1 of the
1940 Act; costs of the designing and of printing and mailing to its shareholders
reports, prospectuses, proxy statements, and notices to its shareholders; taxes;
expenses of the issuance, sale, redemption,  or repurchase of shares of the Fund
(including registration and qualification expenses); legal and auditing fees and
expenses;  compensation, fees, and expenses paid to directors; association dues;
and costs of stationery and forms prepared exclusively for the Fund.

     4. The Fund  shall pay to the  Investment  Adviser  on or before  the tenth
(10th) day of each  month,  as  compensation  for the  services  rendered by the
Investment  Adviser  during the preceding  month, a fee calculated at the annual
rates of:

    (a)   0.24% of the first $1 billion of the Fund's net assets,
          plus 0.20% of the Fund's net assets from $1 billion to $2 billion,
          plus 0.18% of the Fund's net assets from $2 billion to $3 billion,
          plus 0.165% of the Fund's net assets from $3 billion to $5 billion,
          plus 0.155% of the Fund's net assets from $5 billion to $8 billion,
          plus 0.150% of the Fund's net assets from $8 billion to $13 billion,
          plus 0.145% of the Fund's net assets from $13 billion to $17 billion,
          plus 0.140% of the Fund's net assets from $17 billion to $21 billion,
          plus 0.135% of the Fund's net assets from $21 billion to $27 billion,
          plus 0.130% of the Fund's net assets from $27 billion to $34 billion,
          plus 0.125% of the Fund's net assets from $34 billion to $44 billion,
          plus 0.120% of the Fund's net assets in excess of $44 billion, plus

    (b)   3% of the Fund's first $100 million monthly gross income and 2.5% of
          the monthly gross income above $100 million.

     The net asset  portion shall be accrued daily based on the actual number of
days per year.  The net assets of the Fund shall be determined in the manner set
forth in the Articles of  Incorporation  and  Prospectus of the Fund. The income
portion  shall be accrued  daily and "gross  income" for this  purpose  shall be
determined in the same manner as gross income is determined  for and reported in
financial  statements  and shall not  include  gains or losses  from the sale of
securities.  The advisory fee shall be payable for the period  commencing on the
date on which operations of the Fund begin and ending on the date of termination
hereof and shall be prorated for any fraction of a month at the  termination  of
such period.

     5. The Investment Adviser agrees that in the event the expenses of the Fund
(with the exclusion of interest,  taxes, brokerage costs,  distribution expenses
pursuant  to a  plan  under  Rule  12b-1  and  extraordinary  expenses  such  as
litigation and  acquisitions) for any fiscal year ending on a date on which this
Investment  Advisory  and  Service  Agreement  is in effect,  exceed the expense
limitations, if any, applicable to the Fund pursuant to state securities laws or
any regulations thereunder,  it will reduce its fee by the extent of such excess
and, if required  pursuant to any such laws or  regulations,  will reimburse the
Fund in the amount of such excess.

     6. The expense limitation  described in Section 5 shall apply only to Class
A shares issued by the Fund and shall not apply to any other class(es) of shares
the Fund may issue in the future. Any new class(es) of shares issued by the Fund
will not be subject  to an  expense  limitation.  However,  notwithstanding  the
foregoing,  to the  extent the  Investment  Adviser  is  required  to reduce its
management fee pursuant to provisions contained in Section 5 due to the expenses
of the Class A shares  exceeding the stated limit,  the Investment  Adviser will
either (i) reduce its management  fee similarly for other classes of shares,  or
(ii) reimburse the Fund for other expenses to the extent  necessary to result in
an expense reduction only for Class A shares of the Fund.

     7. This  agreement may be terminated  at any time,  without  payment of any
penalty,  by the Board of Directors of the Fund or by vote of a majority (within
the meaning of the  Investment  Company Act of l940) of the  outstanding  voting
securities  of the Fund, on sixty (60) days'  written  notice to the  Investment
Adviser,  or by the Investment Adviser on like notice to the Fund. Unless sooner
terminated in accordance  with this  provision,  this  agreement  shall continue
until October 31, 2005. It may thereafter be renewed from year to year by mutual
consent;  provided  that such renewal  shall be  specifically  approved at least
annually by the Board of Directors of the Fund, or by vote of a majority (within
the meaning of the 1940 Act) of the outstanding  voting  securities of the Fund.
In either  event,  it must be approved by a majority of those  directors who are
not parties to such agreement nor interested  persons of any such party, cast in
person at a meeting  called  for the  purpose of voting on such  approval.  Such
mutual  consent  to  renewal  shall  not be deemed  to have  been  given  unless
evidenced by writing signed by both parties.

     8. This  agreement  shall not be assignable by either party hereto,  and in
the event of assignment  (within the meaning of the 1940 Act) by the  Investment
Adviser shall automatically be terminated forthwith. The term "assignment" shall
have the meaning defined in the 1940 Act.

     9. Nothing  contained in this Agreement  shall be construed to prohibit the
Investment  Adviser  from  performing   investment  advisory,   management,   or
distribution  services  for other  investment  companies  and other  persons  or
companies, nor to prohibit affiliates of the Investment Adviser from engaging in
such business or in other related or unrelated businesses.

     10.  The  Investment  Adviser  shall  not  be  liable  to the  Fund  or its
stockholders for any error of judgment,  act, or omission not involving  willful
misfeasance,   bad  faith,  gross  negligence,  or  reckless  disregard  of  its
obligations and duties hereunder.

     IN WITNESS  WHEREOF,  the parties hereto have caused this  instrument to be
executed in duplicate original by their duly authorized officers.


CAPITAL INCOME BUILDER, INC.



By /s/ James B. Lovelace
   James B. Lovelace, Chairman


By /s/ Vincent P. Corti
   Vincent P. Corti, Secretary





CAPITAL RESEARCH AND MANAGEMENT COMPANY


By /s/ James F. Rothenberg
   James F. Rothenberg, President


By /s/ Michael J. Downer
   Michael J. Downer, Vice President and Secretary