nvcsrs



INVESTMENT MANAGEMENT

Welcome, Shareholder:

In this report, you’ll learn about how your investment in Morgan Stanley Tax-Exempt Securities Trust performed during the semiannual period. We will provide an overview of the market conditions, and discuss some of the factors that affected performance during the reporting period. In addition, this report includes the Fund’s financial statements and a list of Fund investments.

This material must be preceded or accompanied by a prospectus for the fund being offered.

Market forecasts provided in this report may not necessarily come to pass. There is no assurance that the Fund will achieve its investment objective. The Fund is subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund’s shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

Fund Report

For the six months ended June 30, 2009

Total Return for the 6 Months Ended June 30, 2009

Barclays

Lipper

Capital

General

Municipal

Bond

Debt Funds

Class A

Class B

Class C

Class I

Index¹

Index²

8.86%

8.75%

8.50%

8.99%

6.43%

9.77%

The performance of the Fund’s four share classes varies because each has different expenses. The Fund’s total returns assume the reinvestment of all distributions but do not reflect the deduction of any applicable sales charges. Such costs would lower performance. See Performance Summary for standardized performance and benchmark information.

Market Conditions

Although economic conditions remained weak in the first six months of 2009, the contraction in growth slowed. The gross domestic product (GDP) annualized growth rate reported during the period showed a decline of 5.5 percent in the first quarter of the year versus a 6.3 percent decline in the fourth quarter of 2008. At the same time, it appeared that many of the programs the government had introduced in late 2008 to enhance market liquidity were beginning to have an impact. Credit concerns eased, consumer confidence began to improve and the market regained its footing as investors began to assume risk again.

These factors helped all sectors of the fixed income market to rebound in 2009, with the exception of U.S. Treasury securities. After rallying strongly in 2008 amid the flight to quality, the Treasury sector turned in the worst performance of the fixed income market segments in the first half of 2009. Yields rose across the Treasury yield curve, with long maturities experiencing the greatest increases.

The municipal market posted its best year-to-date return in 2009 since 1995. Furthermore, it has done so with less volatility than has been seen in the taxable market. Yield spreads tightened to levels near historical averages across much of the curve. Long maturity municipals performed especially well relative to Treasuries, but since they began the year at historically wide spreads, they still appear to be attractively valued. In a reversal from last year, the high yield segment of the market outpaced the investment grade segment as investors reached for yield. New issue supply overall remained low, measuring approximately half of the volume issued in the first six months of last year.

Performance Analysis

All share classes of Morgan Stanley Tax-Exempt Securities Trust outperformed the Barclays Capital Municipal Bond Index (the “Index”) and underperformed the Lipper General Municipal Debt Funds Index for the six months ended June 30, 2009, assuming no deduction of applicable sales charges.

The Fund’s outperformance versus the Index was attributable primarily to its positioning in two areas. The portfolio was overweighted longer-dated municipal issues, which resulted in outperformance as the spreads on these issues tightened substantially in the first half of 2009. It also had a larger exposure to lower-rated securities (about 19 percent in BBB or lower rated bonds, compared to 8 percent for the Index), which was advantageous as these securities recovered significantly in the first half of the year.

However, the portfolio’s overweight in zero-coupon municipal bonds detracted slightly from relative performance as spreads on these issues widened relative to full-coupon bonds during the first half of 2009.

There is no guarantee that any sectors mentioned will continue to perform as discussed herein or that securities in such sectors will be held by the Fund in the future.


TOP FIVE SECTORS as of 06/30/09
Other Revenue	15	.6%
General Obligation	13	.4
Transportation	12	.8
Hospital	10	.9
Water/Sewer	8	.0


LONG-TERM CREDIT ANALYSIS as of 06/30/09
Aaa/AAA	26	.6%
Aa/AA	27	.7
A/A	26	.8
Baa/BBB	12	.3
Ba/BB or Less	2	.7
Not Rated	3	.9


SUMMARY OF INVESTMENTS BY STATE CLASSIFICATION as of 06/30/09
California	14	.9	%
Texas	13	.2
New York	11	.5
Illinois	7	.6
New Jersey	6	.6
Florida	5	.8
Washington	5	.3
Puerto Rico	3	.3
Georgia	2	.8
Colorado	2	.7
South Carolina	2	.4
Michigan	2	.3
District of Columbia	2	.2
Nevada	1	.7
Arizona	1	.6
Missouri	1	.5
Ohio	1	.5
Maryland	1	.2
Massachusetts	1	.2
Idaho	1	.1	%
Wisconsin	0	.9
Iowa	0	.8
North Carolina	0	.8
Connecticut	0	.8
Alaska	0	.8
Utah	0	.7
Kentucky	0	.7
Hawaii	0	.6
Kansas	0	.6
Tennessee	0	.5
Pennsylvania	0	.4
Alabama	0	.3
New Mexico	0	.3
Vermont	0	.2
Oregon	0	.2
Virginia	0	.2
New Hampshire	0	.0

Total Long-Term Investments ††	99	.2
Short-Term Investment	0	.6
Liability for Floating Rate Note and Dealer Trusts Obligations	(1	.6	)
Other Assets in Excess of Liabilities	1	.8

Net Assets	100	.0	%

†† Does not include open long/short futures contracts with an underlying face value amount of $258,341,073 with net unrealized depreciation of $851,484.

Subject to change daily. Provided for informational purposes only and should not be deemed as a recommendation to buy or sell the securities mentioned or securities in the sectors shown above. Top five sectors are as a percentage of total investments. Long-term credit analysis are as a percentage of long-term investments. Summary of investments by state classification are as a percentage of net assets. Securities are classified by sectors that represent broad groupings of related industries. Morgan Stanley is a full-service securities firm engaged in securities trading and brokerage activities, investment banking, research and analysis, financing and financial advisory services. Rating allocations based upon ratings as issued by Standard and Poor’s and Moody’s, respectively.

Investment Strategy

The Fund will normally invest at least 80 percent of its assets in securities that pay interest exempt from federal income taxes. This policy is fundamental and may not be changed without shareholder approval. The Fund’s “Investment Adviser,” Morgan Stanley Investment Advisors Inc., generally invests the Fund’s assets in municipal obligations. Municipal obligations are bonds, notes or short-term commercial paper issued by state governments, local governments and/or their respective agencies.

For More Information About Portfolio Holdings

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

Householding Notice

To reduce printing and mailing costs, the Fund attempts to eliminate duplicate mailings to the same address. The Fund delivers a single copy of certain shareholder documents, including shareholder reports, prospectuses and proxy materials, to investors with the same last name who reside at the same address. Your participation in this program will continue for an unlimited period of time unless you instruct us otherwise. You can request multiple copies of these documents by calling (800) 869-NEWS, 8:00 a.m. to 8:00 p.m., ET. Once our Customer Service Center has received your instructions, we will begin sending individual copies for each account within 30 days.

Performance Summary

Average Annual Total Returns — Period Ended June 30, 2009

Class A Shares

Class B Shares

Class C Shares

^†

Class I Shares

^††

(since 03/27/80

)

(since 07/28/97

)

(since 07/28/97

)

(since 03/27/80

)

Symbol

TAXAX

TAXBX

TAXCX

TAXDX

1 Year

−1.91

%³

−2.13

%³

−2.34

%³

−1.57

%³

−6.08

⁴

−6.77

⁴

−3.27

⁴

—

5 Years

2.33

1.96

1.83

2.56

1.44

⁴

1.64

⁴

1.83

⁴

—

10 Years

3.82

3.47

3.29

4.03

3.37

⁴

3.47

⁴

3.29

⁴

—

Since Inception

7.10

3.61

3.35

7.35

6.94

⁴

3.61

⁴

3.35

⁴

—

Gross Expense Ratio

0.89

1.25

1.35

0.65

Performance data quoted represents past performance, which is no guarantee of future results and current performance may be lower or higher than the figures shown. For most recent month-end performance figures, please visit www.morganstanley.com/im or speak with your Financial Advisor. Investment returns and principal value will fluctuate and fund shares, when redeemed, may be worth more or less than their original cost. The table does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Performance for Class A, Class B, Class C, and Class I shares will vary due to differences in sales charges and expenses. See the Fund’s current prospectus for complete details on fees and sales charges. Expense ratios are as of each Fund’s fiscal year end as outlined in the Fund’s current prospectus.

Prior to July 28, 1997 the Fund offered only one class of shares. Because the distribution arrangement for Class A most closely resembled the distribution arrangement applicable prior to the implementation of multiple classes (i.e., Class A is sold with a front-end sales charge), historical performance information has been restated to reflect the actual maximum sales charge applicable to Class A (i.e., 4.25%) as compared to the 4.00% sales charge in effect prior to July 28, 1997. In addition, Class A shares are now subject to an ongoing 12b-1 fee which is reflected in the restated performance for that class.

Because all shares of the fund held prior to July 28, 1997 were designated Class I (formerly Class D) shares, the Fund’s historical performance has been restated to reflect the absence of any sales charge.


*		The maximum front-end sales charge for Class A is 4.25%.

**		The maximum contingent deferred sales charge (CDSC) for Class B is 5.0%. The CDSC declines to 0% after six years. Effective April 2005, Class B shares will generally convert to Class A shares approximately eight years after the end of the calendar month in which the shares were purchased. Performance for periods greater than eight years reflects this conversion.

†		The maximum contingent deferred sales charge for Class C is 1.0% for shares redeemed within one year of purchase.

††		Class I has no sales charge.

(1)		The Barclays Capital Municipal Bond Index tracks the performance of municipal bonds rated at least Baa or BBB by Moody’s Investors Service, Inc. or Standard & Poor’s Corporation, respectively and with maturities of two years or greater. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

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

(3)		Figure shown assumes reinvestment of all distributions and does not reflect the deduction of any sales charges.

(4)		Figure shown assumes reinvestment of all distributions and the deduction of the maximum applicable sales charge. See the Fund’s current prospectus for complete details on fees and sales charges.

Expense Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption fees; and (2) ongoing costs, including advisory fees; distribution and service (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period 01/01/09 – 06/30/09.

Actual Expenses

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

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing cost of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) and redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs, and will not help you determine the relative total cost of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.


	Beginning				Expenses Paid
	Account Value		Ending		During Period@
			Account Value		01/01/09 –
	01/01/09		06/30/09		06/30/09

Class A
Actual (8.86% return)	$	1,000.00	$	1,088.60	$	4.45
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,020.53	$	4.31
Class B
Actual (8.75% return)	$	1,000.00	$	1,087.50	$	6.26
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,018.79	$	6.06
Class C
Actual (8.50% return)	$	1,000.00	$	1,085.00	$	6.77
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,018.30	$	6.56
Class I
Actual (8.99% return)	$	1,000.00	$	1,089.90	$	3.16
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,021.77	$	3.06


@		Expenses are equal to the Fund’s annualized expense ratios of 0.86%, 1.21%, 1.31% and 0.61% for Class A, Class B, Class C and Class I shares, respectively, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

Investment Advisory Agreement Approval

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Investment Adviser (as defined herein) under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Fund’s Administrator (as defined herein) under the administration agreement, including accounting, clerical, bookkeeping, compliance, business management and planning, and the provision of supplies, office space and utilities at the Investment Adviser’s expense. (The Investment Adviser and the Administrator together are referred to as the “Adviser” and the advisory and administration agreements together are referred to as the “Management Agreement.”) The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as reported to the Board by Lipper, Inc. (“Lipper”).

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the administrative and advisory services to the Fund. The Board determined that the Adviser’s portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as determined by Lipper, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund’s performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance as of December 31, 2008, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund’s performance was below its peer group average for the one-, three- and five-year periods. The Board discussed with the Adviser the level of the advisory and administration fees (together, the “management fee”) for this Fund relative to comparable funds advised by the Adviser and compared to its peers as determined by Lipper. In addition to the management fee, the Board also reviewed the Fund’s total expense ratio. The Board noted that the Fund’s management fee and total expense ratio were higher but close to the peer group average. After discussion, the Board concluded

that the Fund’s management fee and total expense ratio were competitive with the peer group average, and that the Fund’s performance was acceptable.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund’s total expense ratio and particularly the Fund’s management fee rate, which includes breakpoints. In conjunction with its review of the Adviser’s profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser’s expenses and profitability supports its decision to approve the Management Agreement.

Other Benefits of the Relationship

The Board considers other benefits to the Adviser and its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, “float” benefits derived from handling of checks for purchases and sales, research received by the Adviser generated from commission dollars spent on funds’ portfolio trading and fees for distribution and/or shareholder servicing. The Board reviewed with the Adviser each of these arrangements and the reasonableness of its costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund’s operations and the

Board’s confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund’s Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund’s business.

General Conclusion

After considering and weighing all of the above factors, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single factor referenced above. The Board considered these factors over the course of numerous meetings, some of which were in executive session with only the Independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors differently in reaching their individual decisions to approve the Management Agreement.

Morgan Stanley Tax-Exempt Securities Trust

Portfolio of Investments - June 30, 2009 (unaudited)


PRINCIPAL
AMOUNT IN			COUPON				MATURITY
THOUSANDS			RATE				DATE	VALUE
		Tax-Exempt Municipal Bonds (99.2%)
		Alabama (0.3%)
$	3,710	Jefferson County School Ser 2004-A		5	.25	%	01/01/23	$	2,319,269

		Alaska (0.8%)
	9,000	Northern Tobacco Securitization Corporation, Asset-Backed Ser 2006 A		5	.00		06/01/32		5,876,100

		Arizona (1.6%)
	2,375	Arizona State, Ser 2008 A (COPs) (FSA Insd)		5	.00		09/01/24		2,391,459
	2,420	Arizona State, Ser 2008 A (COPs) (FSA Insd)		5	.00		09/01/26		2,403,302
	3,250	Glendale Industrial Development Authority, John C Lincoln Health Ser 2005 B		5	.25		12/01/23		2,993,218
	2,250	Glendale Industrial Development Authority, John C Lincoln Health Ser 2005 B		5	.25		12/01/25		2,025,202
	2,000	Phoenix Civic Improvement Corporation, Jr Lien Wastewater Ser 2004 (NATL-RE Insd)		5	.00		07/01/27		2,022,920

									11,836,101

		California (14.9%)
	4,535	Alameda County Joint Powers Authority, 2008 Ser A (FSA Insd)		5	.00		12/01/25		4,537,902
	375	Alvord Unified School District, 2007 Election, Ser A (FSA Insd)		5	.00		08/01/25		382,114
	3,025	Alvord Unified School District, 2007 Election, Ser A (FSA Insd) (b)		5	.00		08/01/26		3,060,120
	3,180	Beverly Hills Unified School District, 2008 Election Ser 2009 (f)		0	.00		08/01/26		1,285,897
	40	Beverly Hills Unified School District, 2008 Election Ser 2009 (f)		0	.00		08/01/31		11,660
	6,525	Beverly Hills Unified School District, 2008 Election Ser 2009 (f)		0	.00		08/01/32		1,802,858
	3,000	California County Tobacco Securitization Agency, Los Angeles County Securitization Corp Ser 2006 (f)		0	.00	(a)	06/01/28		1,827,990
	975	California Housing Finance Agency, Home 1983 Ser B (f)		0	.00		08/01/15		585,614
	4,000	California Housing Finance Agency, Home 2006 K (AMT)		4	.70		08/01/31		3,130,440
	4,000	California Housing Finance Agency, Home 2006 K (AMT)		4	.75		08/01/36		3,047,160
	5,000	California Statewide Communities Development Authority, Adventist Health/West 2005 Ser A		5	.00		03/01/30		4,238,750
	2,500	California Statewide Communities Development Authority, Huntington Memorial Hospital Ser 2005		5	.00		07/01/35		2,095,300
	7,000	California Statewide Communities Development Authority, John Muir Health Ser 2006 A		5	.00		08/15/32		6,226,150
	3,500	California, Various Purpose Dtd 04/01/02		6	.00		04/01/19		3,740,765
	20,000	California, Various Purpose Dtd 06/01/07		5	.00		06/01/37		16,808,600
	1,585	Clovis Unified School District, Election of 2004 Ser A (NATL-RE FGIC Insd) (f)		0	.00		08/01/29		427,776
	5,030	El Segundo Unified School District, Election of 2008 Ser A (f)		0	.00		08/01/32		1,110,875
	4,185	El Segundo Unified School District, Election of 2008 Ser A (f)		0	.00		08/01/33		865,751
	10,000	Foothill/Eastern Transportation Corridor Agency Ser 1999 (f)		0	.00	(a)	01/15/27		8,261,900

See Notes to Financial Statements

Morgan Stanley Tax-Exempt Securities Trust

Portfolio of Investments - June 30, 2009 (unaudited) continued


PRINCIPAL
AMOUNT IN			COUPON				MATURITY
THOUSANDS			RATE				DATE	VALUE
$	12,000	Golden State Tobacco Securitization Corporation, Asset Backed Refg Ser 2007 A		5	.125	%	06/01/47	$	6,495,120
	6,500	Golden State Tobacco Securitization Corporation, Enhanced Asset Backed Ser 2005 A		5	.00		06/01/45		5,287,295
	50,000	Golden State Tobacco Securitization Corporation, Enhanced Asset Backed Ser 2005 A (AMBAC Insd) (f)		0	.00		06/01/47		1,125,000
	780	Indio Redevelopment Agency, Tax Allocation Ser 2008 A		5	.125		08/15/25		707,795
	1,960	Indio Redevelopment Agency, Tax Allocation Ser 2008 A		5	.25		08/15/26		1,790,166
	3,560	Loma Linda University Medical Center Ser 2005 A		5	.00		12/01/22		2,946,683
	5,000	Long Beach Unified School District, Election of 2008 Ser A		5	.75		08/01/33		5,268,450
	3,260	Menifee Union School District, 2008 Election Ser C (AGC Insd) (f)		0	.00		08/01/35		587,224
	1,170	Patterson Joint Unified School District, 2008 Election Ser B (FSA Insd) (f)		0	.00		08/01/37		180,823
	4,770	Patterson Joint Unified School District, 2008 Election Ser B (FSA Insd) (f)		0	.00		08/01/38		689,217
	5,010	Patterson Joint Unified School District, 2008 Election Ser B (FSA Insd) (f)		0	.00		08/01/39		676,300
	5,260	Patterson Joint Unified School District, 2008 Election Ser B (FSA Insd) (f)		0	.00		08/01/40		663,339
	5,520	Patterson Joint Unified School District, 2008 Election Ser B (FSA Insd) (f)		0	.00		08/01/41		650,477
	5,800	Patterson Joint Unified School District, 2008 Election Ser B (FSA Insd) (f)		0	.00		08/01/42		638,174
	6,090	Patterson Joint Unified School District, 2008 Election Ser B (FSA Insd) (f)		0	.00		08/01/43		625,808
	145	Patterson Joint Unified School District, 2008 Election Ser B (FSA Insd) (f)		0	.00		08/01/44		13,914
	4,790	Port of Oakland, 2002 Ser L (AMT) (NATL-RE FGIC Insd)		5	.00		11/01/21		4,394,298
	2,000	Riverside County Public Financing Authority, Air Force Village West Inc (COPs)		5	.75		05/15/19		1,735,360
	3,900	Riverside County Public Financing Authority, Air Force Village West Inc (COPs)		5	.80		05/15/29		3,022,305
	9,000	Southern California Public Power Authority, Mead-Adelanto 1994 Ser A (AMBAC Insd)		8	.405	(d)	07/01/15		11,038,320

									111,983,690

		Colorado (2.7%)
	55	Colorado Housing and Finance Authority, 1997 Ser C-2 (AMT)		6	.875		11/01/28		55,856
	155	Colorado Housing and Finance Authority, 1998 Ser A-2 (AMT)		6	.60		05/01/28		156,087
	20,000	E-470 Public Highway Authority Ser 1997 B (NATL-RE Insd) (f)		0	.00		09/01/14		14,696,600
	5,000	E-470 Public Highway Authority Ser 1997 B (NATL-RE Insd) (f)		0	.00		09/01/16		3,144,000
	1,650	Metropolitan Football Stadium District, Sales Tax Ser 1999 A (NATL-RE Insd) (f)		0	.00		01/01/11		1,592,134

See Notes to Financial Statements

Morgan Stanley Tax-Exempt Securities Trust

Portfolio of Investments - June 30, 2009 (unaudited) continued


PRINCIPAL
AMOUNT IN			COUPON				MATURITY
THOUSANDS			RATE				DATE		VALUE
$	750	Public Authority for Colorado Energy Natural Gas, Ser 2008		6	.25	%	11/15/28		$	708,412

										20,353,089

		Connecticut (0.8%)
	1,100	Connecticut Health and Educational Facilities Authority, Quinnipiac University Ser 2007 K-2 (NATL-RE Insd)		5	.00		07/01/23			1,104,752
	9,000	Mashantucket (Western) Pequot Tribe, Special 1997 Ser B (e)		5	.75		09/01/27			4,945,500

										6,050,252

		District of Columbia (2.2%)
	12,000	District of Columbia Ballpark Ser 2006 B-1 (FGIC Insd)		5	.00		02/01/31			9,527,040
	6,860	District of Columbia, Ser 2009A (g)		5	.25		12/01/27			7,255,300

										16,782,340

		Florida (5.8%)
	100	Highlands County Health Facilities Authority, Adventist Health/Sunbelt Ser 2006 C		5	.25		11/15/16	(c)		115,607
	3,900	Highlands County Health Facilities Authority, Adventist Health/Sunbelt Ser 2006 C		5	.25		11/15/36			3,607,227
	8,500	Jacksonville Transportation Ser 2001 (NATL-RE Insd)		5	.00		10/01/26			8,538,845
	2,500	Miami-Dade County Ser 2005 (NATL-RE Insd) (f)		0	.00	(a)	10/01/35			2,297,975
	1,840	Mid-Bay Bridge Authority, Refg Ser 2008 A (AGC Insd)		5	.00		10/01/27			1,868,465
	2,500	Mid-Bay Bridge Authority, Ser 1991 A (ETM)		6	.875		10/01/22			3,205,475
	5,370	Mid-Bay Bridge Authority, Sr Lien Crossover Refg Ser 1993 A (AMBAC Insd)		5	.85		10/01/13			5,533,140
	18,000	South Miami Health Facilities Authority, Baptist Health South Florida Obligated Group Ser 2007 (g)		5	.00		08/15/42			14,764,320
	3,000	Tampa Bay Water, Utility System Refg and Impr Ser 2001A (NATL-RE FGIC Insd)		6	.00		10/01/29			3,416,370

										43,347,424

		Georgia (2.8%)
	4,000	Atlanta Airport Passenger Facility Charge, Ser 2004 C (FSA Insd)		5	.00		01/01/33			3,956,360
	4,000	Atlanta Airport Passenger Facility Charge, Ser 2004 J (FSA Insd)		5	.00		01/01/34			3,933,400
	5,000	Atlanta Airport, Refg Ser 2000 A (NATL-RE FGIC Insd)		5	.875		01/01/17			5,093,350
	3,000	Augusta Water & Sewer Ser 2004 A (FSA Insd) (b)		5	.25		10/01/39			3,025,770
	5,000	Fulton County Water & Sewerage Ser 1998 (FGIC Insd)		4	.75		01/01/28			4,909,450

										20,918,330

		Hawaii (0.6%)
	3,460	Hawaii Airport 2000 Ser B (AMT) (FGIC Insd)		6	.625		07/01/17			3,527,885
	985	Hawaii Housing Finance & Development Corporation, Purchase 1997 Ser A (AMT)		5	.75		07/01/30			1,003,676

										4,531,561

See Notes to Financial Statements

Morgan Stanley Tax-Exempt Securities Trust

Portfolio of Investments - June 30, 2009 (unaudited) continued


PRINCIPAL
AMOUNT IN			COUPON				MATURITY
THOUSANDS			RATE				DATE	VALUE
		Idaho (1.1%)
$	4,230	Idaho Housing & Financing Association, Federal Highway Trust, Ser 2008 A (AGC Insd)		5	.25	%	07/15/23	$	4,484,096
	3,485	Idaho Housing & Financing Association, Federal Highway Trust, Ser 2008 A (AGC Insd)		5	.25		07/15/24		3,679,707

									8,163,803

		Illinois (7.6%)
	5,000	Chicago O’ Hare International Airport Ser 2005 A (NATL-RE Insd)		5	.25		01/01/24		5,052,100
	4,280	Chicago Park District Ser 2004 A (AMBAC Insd)		5	.00		01/01/26		4,355,713
	2,000	Chicago, Refg 2001 A (NATL-RE Insd) (f)		0	.00	(a)	01/01/17		2,094,180
	3,000	Chicago, Refg Ser 1995 A-2 (AMBAC Insd)		6	.25		01/01/14		3,428,190
	4,300	Chicago, Refg Ser 1995 A-2 (AMBAC Insd)		5	.50		01/01/18		4,810,668
	4,840	Chicago Transit Authority, Federal Transit Administration Section 5309 Ser 2008 (AGC Insd)		5	.25		06/01/25		5,077,257
	2,600	De Kalb County Community Unit School District # 428, Ser 2008 (FSA Insd)		5	.00		01/01/26		2,683,590
	990	De Kalb County Community Unit School District # 428, Ser 2008 (FSA Insd)		5	.00		01/01/27		1,015,502
	3,495	Illinois Civic Center Dedicated Tax Ser 1991 (AMBAC Insd)		6	.25		12/15/20		3,866,029
	2,000	Illinois Finance Authority, Rush University Medical Center Obligated Group Ser 2009A		7	.25		11/01/38		2,175,000
	3,295	Kendall, Kane and Will Counties Community Unit School District # 308 Ser 2008 (FSA Insd) (f)		0	.00		02/01/20		1,954,067
	11,500	Kendall, Kane and Will Counties Community Unit School District # 308 Ser 2008 (FSA Insd) (f)		0	.00		02/01/23		5,517,010
	20,000	Metropolitan Pier & Exposition Authority, Refg Ser 2002 B (NATL-RE Insd) (f)		0	.00	(a)	06/15/22		14,691,400

									56,720,706

		Iowa (0.8%)
	3,500	Tobacco Settlement Authority Ser 2005 C		5	.375		06/01/38		2,083,725
	5,250	Tobacco Settlement Authority Ser 2005 C		5	.50		06/01/42		3,163,545
	1,275	Washington County Hospital Ser 2006		5	.50		07/01/32		1,094,792

									6,342,062

		Kansas (0.6%)
	2,000	University of Kansas Hospital Authority, KU Health Ser 2002		4	.50		09/01/32		1,711,640
	3,000	Wyandotte County/Kansas City, Area B Refg Ser 2005		5	.00		12/01/20		2,818,170

									4,529,810

See Notes to Financial Statements

Morgan Stanley Tax-Exempt Securities Trust

Portfolio of Investments - June 30, 2009 (unaudited) continued


PRINCIPAL
AMOUNT IN			COUPON				MATURITY
THOUSANDS			RATE				DATE		VALUE
		Kentucky (0.7%)
$	5,000	Louisville & Jefferson County Metropolitan Sewer District Ser 1998 A (FGIC Insd)		4	.75	%	05/15/28		$	4,938,350

		Maryland (1.2%)
	2,500	Baltimore County, Oak Crest Village Ser 2007 A		5	.00		01/01/37			2,089,150
	2,000	Maryland Health & Higher Educational Facilities Authority, King Farm Presbyterian Community 2006 Ser B		5	.00		01/01/17			1,599,820
	6,000	Maryland Health & Higher Educational Facilities Authority, Medstar Health Refg Ser 2004		5	.50		08/15/33			5,598,000

										9,286,970

		Massachusetts (1.2%)
	6,000	Boston Water & Sewer Commission, 1998 Ser D (FGIC Insd)		4	.75		11/01/22			6,008,700
	785	Massachusetts Health & Educational Facilities Authority, Malden Hospital-FHA Insured Ser A		5	.00		08/01/10	(c)		805,967
	2,100	Massachusetts Health and Educational Facilities Authority, Boston College 2008 Ser M-2		5	.50		06/01/30			2,310,252

										9,124,919

		Michigan (2.3%)
	4,100	Detroit Water Supply System, Second Lien Refg Ser 2006 C (FSA Insd)		5	.00		07/01/26			3,884,094
	4,000	Michigan Hospital Finance Authority, Henry Ford Health Refg Ser 2006 A		5	.25		11/15/32			3,161,440
	1,660	Michigan Hospital Finance Authority, Henry Ford Health Refg Ser 2006 A		5	.25		11/15/46			1,245,764
	10,000	Michigan Strategic Fund, Detroit Edison Co Ser 1999 B (AMT)		5	.65		09/01/29			8,776,500

										17,067,798

		Missouri (1.5%)
	10,000	Missouri Health & Educational Facilities Authority, Barnes-Jewish/Christian Health Ser 1993 A		5	.25		05/15/14			10,785,600
	270	Missouri Housing Development Commission, Homeownership 1997 Ser C-1		6	.55		09/01/28			280,900
	140	Missouri Housing Development Commission, Homeownership Ser 2000 B-1 (AMT)		7	.45		09/01/31			143,576

										11,210,076

		Nevada (1.7%)
	5,000	Clark County Airport Sub Lien Ser 2004 (AMT) (FGIC Insd)		5	.50		07/01/23			4,834,250
	4,000	Clark County School District, Limited Tax Ser 2007C		5	.00		06/15/26			3,888,520
	3,000	Clark County Transportation Ser 1992 A (AMBAC Insd)		6	.50		06/01/17			3,442,380

See Notes to Financial Statements

Morgan Stanley Tax-Exempt Securities Trust

Portfolio of Investments - June 30, 2009 (unaudited) continued


PRINCIPAL
AMOUNT IN			COUPON				MATURITY
THOUSANDS			RATE				DATE	VALUE
$	2,850	Nevada Department of Business & Industry, Las Vegas Monorail 1st Tier Ser 2000 (AMBAC Insd)		5	.375	%	01/01/40	$	881,961

									13,047,111

		New Hampshire (0.0%)
	345	New Hampshire Housing Finance Authority, Mortgage Acquisition 2000 Ser B (AMT)		6	.70		07/01/29		348,899

		New Jersey (6.6%)
	2,000	New Jersey Economic Development Authority, Cigarette Tax Ser 2004		5	.50		06/15/31		1,511,580
	1,140	New Jersey Economic Development Authority, Cigarette Tax Ser 2004		5	.75		06/15/34		874,563
	4,000	New Jersey Economic Development Authority, Continental Airlines Inc. Ser 1999 (AMT)		6	.25		09/15/19		3,292,120
	3,885	New Jersey Economic Development Authority, School Facilities Construction Refg 2005 Ser N-1 (AMBAC Insd)		5	.50		09/01/24		4,136,476
	9,000	New Jersey Health Care Facilities Financing Authority, Robert Wood Johnson University Hospital Ser 2000		5	.75		07/01/25		9,022,500
	19,265	New Jersey Transportation Trust Fund Authority, Transportation System 2006 Ser C (AGC Insd) (f)		0	.00		12/15/26		6,961,793
	10,000	New Jersey Turnpike Authority Ser 2003 A (FGIC Insd)		5	.00		01/01/27		10,126,500
	9,000	Passaic Valley Sewerage Commissioners Ser F (FGIC Insd)		5	.00		12/01/19		8,379,090
	7,000	Tobacco Settlement Financing Corporation Ser 2007-1 A		4	.625		06/01/26		4,750,690
	5,000	Tobacco Settlement Financing Corporation Ser 2007-1 B (f)		0	.00		06/01/41		217,950

									49,273,262

		New Mexico (0.3%)
	2,000	Albuquerque Gross Receipts Lodgers’ Tax, Refg Ser 2004 A (FSA Insd) (b)		5	.00		07/01/37		2,003,500

		New York (11.5%)
	5,000	Long Island Power Authority Ser 2000 A (FSA Insd) (f)		0	.00		06/01/17		3,683,500
	5,000	Metropolitan Transportation Authority, State Service Contract Ser 2002 B (NATL-RE Insd)		5	.50		07/01/24		5,088,400
	2,900	New York City Housing Development Corporation, Ruppert-FHA Ins Sec 223 F		6	.50		11/15/18		3,050,083
	6,000	New York City Industrial Development Agency, 7 World Trade Center LLC Ser 2005 A		6	.25		03/01/15		5,238,900
	4,000	New York City Industrial Development Agency, 7 World Trade Center LLC Ser 2005 A		6	.50		03/01/35		2,877,640
	12,000	New York City Industrial Development Agency, American Airlines Inc Ser 2005 (AMT)		7	.625		08/01/25		10,360,320
	5,000	New York City Industrial Development Agency, Yankee Stadium Ser 2006 (NATL-RE Insd)		4	.75		03/01/46		3,837,900
	5,000	New York City Municipal Water Finance Authority, 2005 Ser B (AMBAC Insd)		5	.00		06/15/28		5,097,900

See Notes to Financial Statements

Morgan Stanley Tax-Exempt Securities Trust

Portfolio of Investments - June 30, 2009 (unaudited) continued


PRINCIPAL
AMOUNT IN			COUPON				MATURITY
THOUSANDS			RATE				DATE	VALUE
$	2,225	New York City Subser 2008 L-1		5	.00	%	04/01/27	$	2,243,668
	7,000	New York City Transitional Finance Authority, 2003 Ser D (NATL-RE Insd)		5	.25		02/01/21		7,306,950
	7,000	New York State Dormitory Authority, Memorial Sloan-Kettering Cancer Center 2003 Ser I		5	.00		07/01/34		6,834,030
	2,000	New York State Dormitory Authority, State University 1990 Ser A		7	.50		05/15/13		2,336,480
	5,000	New York State Dormitory Authority, State University 1993 Ser A		5	.25		05/15/15		5,443,650
	8,815	New York State Dormitory Authority, Suffolk County Judicial Ser 1986 (ETM)		7	.375		07/01/16		10,381,954
	10,000	Sales Tax Asset Receivable Corporation, 2005 Ser A (AMBAC Insd)		5	.00		10/15/29		10,208,800
	3,000	Westchester Tobacco Asset Securitization Corporation, Ser 2005		5	.125		06/01/38		2,031,990

									86,022,165

		North Carolina (0.8%)
	4,750	North Carolina Municipal Power Agency # 1, Catawba Ser 1998 A (NATL-RE Insd)		5	.50		01/01/15		5,182,060
	1,100	North Carolina Municipal Power Agency # 1, Catawba Ser 2003 A (NATL-RE Insd)		5	.25		01/01/19		1,125,388

									6,307,448


		Ohio (1.5%)
	3,895	Cleveland Public Power System, Ser 2008 B-1 (NATL-RE Insd) (f)		0	.00		11/15/25		1,628,227
	3,000	Erie County Firelands Regional Medical Center Ser 2002		5	.625		08/15/32		2,512,500
	1,110	Hamilton County, Sales Tax 2000 (AMBAC Insd)		5	.25		12/01/32		1,056,820
	5,000	Lorain County Catholic Health Ser 9 2001 A		5	.25		10/01/33		4,680,900
	1,140	Ohio Water Development Authority Pollution Control Facilities, First Energy Refg Ser 2009 A		5	.875	(a)	06/01/33		1,163,803

									11,042,250

		Oregon (0.2%)
	1,280	Jackson County, Medford School District # 549C Ser 2008		4	.25		06/15/23		1,293,875

		Pennsylvania (0.4%)
	1,685	Chester County Industrial Development Authority, RHA/PA Nursing Home Inc Ser 1989		8	.50		05/01/32		1,582,754
	2,000	Montgomery County White Marsh Ser 2005		6	.125		02/01/28		1,336,900

									2,919,654

		Puerto Rico (3.3%)
	15,000	Puerto Rico Electric Power Authority Ser O (f)		0	.00		07/01/17		10,843,500
	10,000	Puerto Rico Highway & Transportation Authority Refg Ser X		5	.50		07/01/15		9,982,300
	3,815	Puerto Rico Sales Tax Financing Corp, SubSer 2009 A		5	.00	(a)	08/01/39		3,861,505

									24,687,305

See Notes to Financial Statements

Morgan Stanley Tax-Exempt Securities Trust

Portfolio of Investments - June 30, 2009 (unaudited) continued


PRINCIPAL
AMOUNT IN			COUPON				MATURITY
THOUSANDS			RATE				DATE	VALUE
		South Carolina (2.4%)
$	5,000	Charleston Educational Excellence Financing Corporation, Charleston County School District Ser 2005		5	.25	%	12/01/30	$	5,010,550
	210	Lexington County Health Services District Inc, Refg Ser 2007		5	.00		11/01/16		217,108
	1,025	Richland County Environment Improvement Refg Ser 2007 A		4	.60		09/01/12		999,734
	5,430	South Carolina Transporation Infrastructure Bank, Ser 2002A (AMBAC Insd)		5	.25		10/01/21		5,536,754
	5,995	South Carolina Transporation Infrastructure Bank, Ser 2002A (AMBAC Insd)		5	.25		10/01/22		6,099,253

									17,863,399

		Tennessee (0.5%)
	4,600	Tennessee Energy Acquisition Corporation Ser 2006 A		5	.25		09/01/19		4,076,014

		Texas (13.2%)
	1,610	Board of Regents of the Texas A&M University System, Financing System Ser 2009A		5	.00		05/15/25		1,722,024
	10,000	Dallas/Fort Worth International Airport Ser 2003 A (AMT) (FSA Insd)		5	.25		11/01/24		9,793,100
	2,840	Friendswood Independent School District, Schoolhouse Ser 2008		5	.00		02/15/26		2,983,959
	3,860	Harris Country Health Facilities Development Corporation, Thermal Utility, Teco Ser 2008 (AGC Insd)		5	.00		11/15/26		3,802,525
	3,180	Harris Country Health Facilities Development Corporation, Thermal Utility, Teco Ser 2008 (AGC Insd)		5	.00		11/15/27		3,112,489
	6,665	Harris County, Refg Ser 2007 C (FSA Insd)		5	.25		08/15/31		7,136,882
	2,920	Harris County, Refg Ser 2009 A		5	.00		08/15/31		2,938,279
	5,000	Houston Airport Sub Lien Ser 2000 A (AMT) (FSA Insd)		5	.875		07/01/17		5,042,300
	20,000	Houston Combined Utility System, First Lien Refg Ser 2004 A (FSA Insd)		5	.25		05/15/22		20,807,000
	5,000	Houston Combined Utility System, First Lien Refg Ser 2004 A (NATL-RE Insd)		5	.25		05/15/25		5,168,900
	8,750	Houston Hotel Occupancy Tax, Ser 2001 B (FSA AMBAC Insd) (f)		0	.00		09/01/26		3,155,162
	3,600	Houston Hotel Occupancy Tax, Ser 2001 B (FSA AMBAC Insd) (f)		0	.00		09/01/27		1,203,984
	6,875	Houston Independent School District, Schoolhouse Ser 2008		5	.00		02/15/26		7,221,225
	5,000	Lubbock Health Facilities Development Corporation, Carillon Senior Life Care Ser 2005 A		6	.625		07/01/36		3,751,250
	22,800	North Texas Tollway Authority, Refg First Tier Ser 2008 D (AGC Insd) (f)		0	.00		01/01/28		7,527,420
	2,165	North Texas Tollway Authority, Refg First Tier Ser 2008 D (AGC Insd) (f)		0	.00		01/01/29		663,096
	4,710	North Texas Tollway Authority, Refg First Tier Ser 2008 D (AGC Insd) (f)		0	.00		01/01/31		1,256,628
	5,000	San Antonio Water System Refg Ser 2002 (FSA Insd)		5	.00		05/15/28		5,063,750
	2,700	Tarrant County Cultural Education Facilities Finance Corporation, Texas Health Resources Refg Ser 2007 A		5	.00		02/15/17		2,805,435

See Notes to Financial Statements

Morgan Stanley Tax-Exempt Securities Trust

Portfolio of Investments - June 30, 2009 (unaudited) continued


PRINCIPAL
AMOUNT IN			COUPON				MATURITY
THOUSANDS			RATE				DATE	VALUE
$	1,490	Texas Municipal Gas Acquisition and Supply Corporation, Senior Lien Ser 2008 D		6	.25	%	12/15/26	$	1,425,960
	1,000	Texas Turnpike Authority, First Tier Ser 2002 (BHAC AMBAC Insd) (f)		0	.00		08/15/27		379,350
	1,790	Victoria Independent School District, School Building Ser 2008		5	.00		02/15/23		1,926,989

									98,887,707

		Utah (0.7%)
	5,000	Salt Lake City IHC Hospital Inc Ser 1983 (ETM)		5	.00		06/01/15		5,556,300

		Vermont (0.2%)
	2,550	Vermont Economic Development Authority, Wake Robin Corp Ser 2006 A		5	.375		05/01/36		1,735,301

		Virginia (0.2%)
	1,000	Tobacco Settlement Financing Corporation, Asset-Backed Ser 2005		5	.50		06/01/12(c)		1,107,080

		Washington (5.3%)
	5,000	Grant County Public Utility District #2, Electric Refg Ser 2001 H (FSA Insd)		5	.375		01/01/18		5,221,300
	5,000	Grant County Public Utility District #2, Wanapum Hydro Refg Ser A 2005		5	.00		01/01/38		4,787,800
	4,420	Port of Seattle Passenger Facility Ser 1998 A (NATL-RE Insd)		5	.00		12/01/23		4,300,306
	2,450	Seattle Drainage and Wastewater, Ser 2008		5	.00		06/01/25		2,565,861
	10,000	Seattle Water Refg 2003 (NATL-RE Insd)		5	.00		09/01/20		10,264,000
	10,000	Seattle Water Refg 2003 (NATL-RE Insd)		5	.00		09/01/23		10,229,500
	2,250	Washington, Motor Vehicle Fuel Tax Ser 2008 B		5	.00		07/01/27		2,340,247

									39,709,014

		Wisconsin (0.9%)
	5,000	Wisconsin, 2009 Ser A		5	.625		05/01/28		5,255,950
	1,500	Wisconsin Health & Educational Facilities Authority, Marshfield Clinic Ser 2006 A		5	.375		02/15/34		1,300,590

									6,556,540

		Total Tax-Exempt Municipal Bonds (Cost $783,702,772)							743,819,474

		Short-Term Investments (0.6%)
		US Government Obligation (0.2%)
	1,500	US Treasury Bill (b) (Cost $1,498,492)		0	.27		11/12/2009		1,498,492

See Notes to Financial Statements

Morgan Stanley Tax-Exempt Securities Trust

Portfolio of Investments - June 30, 2009 (unaudited) continued


NUMBER OF
SHARES (000)				VALUE

		Investment Company (0.4%) (h)
	2,567	Morgan Stanley Institutional Liquidity Funds – Tax-Exempt Portfolio – Institutional Class (Cost $2,567,391)		$	2,567,391

		Total Short-Term Investments (Cost $4,065,883)			4,065,883


		Total Investments (Cost $787,768,655) (j) (k)	99.8%		747,885,357

		Other Assets in Excess of Liabilities	1.8		13,673,352

		Floating Rate Note and Dealer Trusts Obligations Related to Securities Held
		Notes with interest rate of 0.28% at June 30, 2009 and contractual maturity of collateral ranging from 12/01/27 to 08/15/42 (See Note 1D) (i) (Cost $(11,770,000))	(1.6)		(11,770,000	)


		Net Assets	100.0%	$	749,788,709


AMT		Alternative Minimum Tax.
COPs		Certificates of Participation.
ETM		Escrowed to Maturity.
(a)		Security is a “step-up” bond where the coupon increases on a predetermined future date.
(b)		A portion of this security has been physically segregated in connection with open futures contracts.
(c)		Prerefunded to call date shown.
(d)		Current coupon rate for an inverse floating rate municipal obligation. This rate resets periodically as the auction rate on the related security changes. Position in an inverse floating rate municipal obligation has a total value of $11,038,320 which represents 1.5% of net assets.
(e)		Resale is restricted to qualified institutional investors.
(f)		Capital appreciation bond.
(g)		Underlying security related to inverse floaters entered into by the Fund (See Note 1D).
(h)		See Note 4 to the financial statements regarding investments in Morgan Stanley Institutional Liquidity Funds-Tax-Exempt Portfolio-Institutional Class.
(i)		Floating rate note and dealer trusts obligations related to securities held. The interest rate shown reflects the rate in effect at June 30, 2009.
(j)		Securities have been designated as collateral in connection with open futures contracts and inverse floating rate municipal obligations.
(k)		The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $22,223,269 and the aggregate gross unrealized depreciation is $62,106,567, resulting in net unrealized depreciation of $39,883,298. .


Bond Insurance:
AGC		Assured Guaranty Corporation
AMBAC		AMBAC Assurance Corporation.
BHAC		Berkshire Hathaway Assurance Corporation.
FGIC		Financial Guaranty Insurance Company.
FHA		Federal Housing Administration.
FSA		Financial Security Assurance Inc.
NATL-RE		National Public Finance Guarnatee Corporation.

See Notes to Financial Statements

Morgan Stanley Tax-Exempt Securities Trust

Portfolio of Investments - June 30, 2009 (unaudited) continued

Futures Contracts Open at June 30, 2009:


							UNREALIZED
NUMBER OF			DESCRIPTION, DELIVERY	UNDERLYING FACE			APPRECIATION
CONTRACTS		LONG/SHORT	MONTH AND YEAR	AMOUNT AT VALUE			(DEPRECIATION)
	361	Long	U.S. Treasury Note Future 2 Year September 2009	$	78,054,972		$	(106,804	)
	311	Long	U.S. Treasury Note Future 10 Year September 2009		36,158,611			689,699
	302	Long	U.S. Treasury Note Future 5 Year September 2009		34,645,063			(93,010	)
	925	Short	U.S. Treasury Bond Future 20 Year September 2009		(109,482,427	)		(1,341,369	)

			Net Unrealized Depreciation				$	(851,484	)

See Notes to Financial Statements

Morgan Stanley Tax-Exempt Securities Trust

Financial Statements

Statement of Assets and Liabilities

June 30, 2009 (unaudited)


Assets:
Investments in securities, at value (cost $785,201,264)	$745,317,966
Investments in affiliate, at value (cost $2,567,391)	2,567,391
Receivable for:
Interest	10,583,332
Investment sold	4,359,688
Shares of beneficial interest sold	267,448
Variation margin	68,626
Dividends from affiliate	1,848
Prepaid expenses and other assets	88,448

Total Assets	763,254,747

Liabilities:
Floating rate note and dealer trusts obligations	11,770,000
Payable for:
Shares of beneficial interest redeemed	677,905
Dividends to shareholders	400,731
Investment advisory fee	258,968
Distribution fee	70,409
Administration fee	53,158
Transfer agent fee	44,032
Payable to bank	1,796
Accrued expenses and other payables	189,039

Total Liabilities	13,466,038

Net Assets	$749,788,709

Composition of Net Assets:
Paid-in-capital	$802,296,817
Net unrealized depreciation	(40,734,782	)
Accumulated undistributed net investment income	1,080,245
Accumulated net realized loss	(12,853,571	)


Net Assets	$749,788,709

Class A Shares:
Net Assets	$154,444,188
Shares Outstanding (unlimited authorized, $.01 par value)	15,394,169
Net Asset Value Per Share	$10.03

Maximum Offering Price Per Share, (net asset value plus 4.44% of net asset value)	$10.48


Class B Shares:
Net Assets	$41,086,770
Shares Outstanding (unlimited authorized, $.01 par value)	4,077,486
Net Asset Value Per Share	$10.08

Class C Shares:
Net Assets	$22,266,397
Shares Outstanding (unlimited authorized, $.01 par value)	2,217,159
Net Asset Value Per Share	$10.04

Class I Shares:
Net Assets	$531,991,354
Shares Outstanding (unlimited authorized, $.01 par value)	53,059,873
Net Asset Value Per Share	$10.03

See Notes to Financial Statements

Morgan Stanley Tax-Exempt Securities Trust

Financial Statements continued

Statement of Operations

For the six months ended June 30, 2009 (unaudited)


Net Investment Income:
Income
Interest	$	21,300,805
Dividends from affiliate		22,556

Total Income		21,323,361

Expenses
Investment advisory fee		1,477,126
Distribution fee (Class A shares)		187,261
Distribution fee (Class B shares)		134,961
Distribution fee (Class C shares)		76,952
Administration fee		299,880
Transfer agent fees and expenses		217,583
Interest and residual trust expenses		73,992
Shareholder reports and notices		53,397
Professional fees		51,587
Registration fees		26,346
Custodian fees		19,454
Trustees’ fees and expenses		15,713
Other		46,737

Total Expenses		2,680,989

Less: rebate from Morgan Stanley affiliated cash sweep (Note 4)		(8,312	)

Net Expenses		2,672,677

Net Investment Income		18,650,684

Realized and Unrealized Gain (Loss):
Realized Gain (Loss) on:
Investments		(10,742,790	)
Futures contracts		1,930,865

Net Realized Loss		(8,811,925	)

Change in Unrealized Appreciation/Depreciation on:
Investments		50,933,200
Futures contracts		3,913,659

Net Change in Unrealized Appreciation/Depreciation		54,846,859

Net Gain		46,034,934

Net Increase	$	64,685,618

See Notes to Financial Statements

Morgan Stanley Tax-Exempt Securities Trust

Financial Statements continued

Statements of Changes in Net Assets


	FOR THE SIX			FOR THE YEAR
	MONTHS ENDED			ENDED
	JUNE 30, 2009			DECEMBER 31, 2008
	(unaudited)

Increase (Decrease) in Net Assets:
Operations:
Net investment income	$	18,650,684		$	40,926,928
Net realized gain (loss)		(8,811,925	)		1,841,673
Net change in unrealized appreciation/depreciation		54,846,859			(137,683,033	)

Net Increase (Decrease)		64,685,618			(94,914,432	)

Dividends and Distributions to Shareholders from:
Net investment income
Class A shares		(3,591,406	)		(7,398,282	)
Class B shares		(1,001,359	)		(2,558,248	)
Class C shares		(477,125	)		(1,006,318	)
Class I shares		(13,448,613	)		(30,302,604	)
Net realized gain
Class A shares		—			(1,304,985	)
Class B shares		—			(444,252	)
Class C shares		—			(193,147	)
Class I shares		—			(4,887,753	)

Total Dividends and Distributions		(18,518,503	)		(48,095,589	)

Net decrease from transactions in shares of beneficial interest		(27,209,163	)		(90,490,906	)

Net Increase (Decrease)		18,957,952			(233,500,927	)
Net Assets:
Beginning of period		730,830,757			964,331,684

End of Period (Including accumulated undistributed net investment income of $1,080,245 and $948,064, respectively)	$	749,788,709		$	730,830,757

See Notes to Financial Statements

Morgan Stanley Tax-Exempt Securities Trust

Notes to Financial Statements - June 30, 2009 (unaudited)

1. Organization and Accounting Policies

Morgan Stanley Tax-Exempt Securities Trust (the “Fund”) is registered under the Investment Company Act of 1940, as amended the (“Act”), as a diversified, open-end management investment company. The Fund’s investment objective is to provide a high level of current income which is exempt from federal income tax, consistent with the preservation of capital. The Fund was incorporated in Maryland on December 31, 1979, commenced operations on March 27, 1980 and reorganized as a Massachusetts business trust on April 30, 1987. On July 28, 1997, the Fund converted to a multiple class share structure.

The Fund offers Class A shares, Class B shares, Class C shares and Class I shares. The four classes are substantially the same except that most Class A shares are subject to a sales charge imposed at the time of purchase and some Class A shares, and most Class B shares and Class C shares are subject to a contingent deferred sales charge imposed on shares redeemed within eighteen months, six years and one year, respectively. Class I shares are not subject to a sales charge. Additionally, Class A shares, Class B shares and Class C shares incur distribution expenses.

For the period January 1, 2009 to January 20, 2009, the Fund assessed a 2% redemption fee on Class A shares, Class B shares, Class C shares, and Class I shares, which was paid directly to the Fund, for shares redeemed or exchanged within seven days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Fund and its remaining shareholders from the effects of short-term trading. The Board of Trustees of the Fund approved the elimination of redemption fees, effective January 21, 2009.

The following is a summary of significant accounting policies:

A. Valuation of Investments — (1) portfolio securities are valued by an outside independent pricing service approved by the Trustees. The pricing service uses both a computerized grid matrix of tax-exempt securities and evaluations by its staff, in each case based on information concerning market transactions and quotations from dealers which reflect the mean between the last reported bid and asked price. The portfolio securities are thus valued by reference to a combination of transactions and quotations for the same or other securities believed to be comparable in quality, coupon, maturity, type of issue, call provisions, trading characteristics and other features deemed to be relevant. The Trustees believe that timely and reliable market quotations are generally not readily available for purposes of valuing tax-exempt securities and that the valuations supplied by the pricing service are more likely to approximate the fair value of such securities; (2) futures are valued at the latest sale price on the commodities exchange on which they trade unless it is determined that such price does not reflect their market value, in which case they will be valued at their fair value as determined in good faith under procedures established by and under the supervision of the Trustees; (3) interest rate swaps are marked-to-market daily based upon quotations from market makers; (4) investments in open-end mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are

Morgan Stanley Tax-Exempt Securities Trust

Notes to Financial Statements - June 30, 2009 (unaudited) continued

valued at the net asset value as of the close of each business day; and (5) short-term debt securities having a maturity date of more than sixty days at time of purchase are valued on a mark-to-market basis until sixty days prior to maturity and thereafter at amortized cost based on their value on the 61st day. Short-term debt securities having a maturity date of sixty days or less at the time of purchase are valued at amortized cost, which approximates market value.

B. Accounting for Investments — Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on security transactions are determined by the identified cost method. Discounts are accreted and premiums are amortized over the life of the respective securities and are included in interest income. Interest income is accrued daily as earned.

C. Multiple Class Allocations — Investment income, expenses (other than distribution fees), and realized and unrealized gains and losses are allocated to each class of shares based upon the relative net asset value on the date such items are recognized. Distribution fees are charged directly to the respective class.

D. Floating Rate Note and Dealer Trusts Obligations Related to Securities Held — The Fund enters into transactions in which it transfers to Dealer Trusts (“Dealer Trusts”), fixed rate bonds in exchange for cash and residual interests in the Dealer Trusts’ assets and cash flows, which are in the form of inverse floating rate investments. The Dealer Trusts fund the purchases of the fixed rate bonds by issuing floating rate notes to third parties and allowing the Fund to retain residual interest in the bonds. The Fund enters into shortfall agreements with the Dealer Trusts which commit the Fund to pay the Dealer Trusts, in certain circumstances, the difference between the liquidation value of the fixed rate bonds held by the Dealer Trusts and the liquidation value of the floating rate notes held by third parties, as well as any shortfalls in interest cash flows. The residual interests held by the Fund (inverse floating rate investments) include the right of the Fund (1) to cause the holders of the floating rate notes to tender their notes at par at the next interest rate reset date, and (2) to transfer the municipal bond from the Dealer Trusts to the Fund, thereby collapsing the Dealer Trusts. The Fund accounts for the transfer of bonds to the Dealer Trusts as secured borrowings, with the securities transferred remaining in the Fund’s investment assets, and the related floating rate notes reflected as Fund liabilities under the caption “floating rate note and dealer trusts obligations” on the Statement of Assets and Liabilities. The Fund records the interest income from the fixed rate bonds under the caption “interest” and records the expenses related to floating rate note and dealer trusts obligations and any administrative expenses of the Dealer Trusts under the caption “interest and residual trust expenses” in the Statement of Operations. The floating rate notes issued by the Dealer Trusts have interest rates that reset weekly and the floating rate note holders have the option to tender their notes to the Dealer Trusts for redemption at par at each reset date. At June 30, 2009, Fund investments with a value of $22,019,620 are held by the Dealer Trusts and serve as collateral for the $11,770,000 in floating rate note and dealer trusts

Morgan Stanley Tax-Exempt Securities Trust

Notes to Financial Statements - June 30, 2009 (unaudited) continued

obligations outstanding at that date. The range of contractual maturities of the floating rate note and dealer trusts obligations and interest rates in effect at June 30, 2009 are presented in the Portfolio of Investments.

E. Futures Contracts — A futures contract is an agreement between two parties to buy and sell financial instruments or contracts based on financial indices at a set price on a future date. Upon entering into such a contract, the Fund is required to pledge to the broker cash, U.S. Government securities or other liquid portfolio securities equal to the minimum initial margin requirements of the applicable futures exchange. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in the value of the contract. Such receipts or payments known as variation margin are recorded by the Fund as unrealized gains and losses. Upon closing of the contract, the Fund realizes a gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.

F. Interest Rate Swaps — The Fund may enter into interest rate swaps primarily to preserve a return or spread on a particular investment or portion of its portfolio, as a duration management technique or to protect against any increase in the price of securities the Fund anticipates purchasing at a later date. Interest rate swaps are contractual agreements to exchange periodic interest payment streams calculated on a predetermined notional principal amount. Interest rate swaps generally involve one party paying a fixed interest rate and the other party paying a variable rate. The Fund will usually enter into interest rate swaps on a net basis, i.e, the two payment streams are netted out in a cash settlement on the payment date or dates specified in the instrument, with the Fund receiving or paying, as the case may be, only the net amount of the two payments. The Fund accrues the net amount with respect to each interest rate swaps on a daily basis. This net amount is recorded within realized gains/losses on swaps contracts on the Statement of Operations.

Swap agreements are not entered into or traded on exchanges and there is no central clearing or guaranty function for swaps. Therefore, swaps are subject to the risk of default or non-performance by the counterparty. If there is a default by the counterparty to a swap agreement, the Fund will have contractual remedies pursuant to the agreements related to the transaction. Counterparties are required to pledge collateral daily (based on the valuation of each swap) on behalf of the Fund with a value approximately equal to the amount of any unrealized gain. Reciprocally, when the Fund has an unrealized loss on a swap contract, the Fund has instructed the custodian to pledge cash or liquid securities as collateral with a value approximately equal to the amount of the unrealized loss. Collateral pledges are monitored and subsequently adjusted if and when the swap valuations fluctuate. For cash collateral received, the Fund pays a monthly fee to the counterparty based on the effective rate for Federal Funds.

G. Federal Income Tax Policy — It is the Fund’s policy to comply with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all

Morgan Stanley Tax-Exempt Securities Trust

Notes to Financial Statements - June 30, 2009 (unaudited) continued

of its taxable and nontaxable income to its shareholders. Therefore, no federal income tax provision is required. The Fund files tax returns with the U.S. Internal Revenue Service, New York State and New York City. The Fund follows the provisions of the Financial Accounting Standards Board (“FASB”) Interpretation No. 48 (“FIN 48”) Accounting for Uncertainty in Income Taxes. FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There are no unrecognized tax benefits in the accompanying financial statements. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in other expenses in the Statement of Operations. Each of the tax years in the four year period ended December 31, 2008, remains subject to examination by taxing authorities.

The Fund purchases municipal securities whose interest, in the opinion of the issuer, is free from federal income tax. There is no assurance that the Internal Revenue Service (“IRS”) will agree with this opinion. In the event the IRS determines that the issuer does not comply with relevant tax requirements, interest payments from a security could become federally taxable.

H. Dividends and Distributions to Shareholders — Dividends and distributions to shareholders are recorded on the ex-dividend date.

I. Use of Estimates — The preparation of financial statements in accordance with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts and disclosures. Actual results could differ from those estimates.

J. Subsequent Events — The Fund considers events or transactions that occur after the date of the statement of assets and liabilities but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated through August 26, 2009, the date of issuance of these financial statements.

2. Investment Advisory/Administration Agreements

Pursuant to an Investment Advisory Agreement with Morgan Stanley Investment Advisors Inc. (the “Investment Adviser”), the Fund pays the Investment Adviser an advisory fee, accrued daily and payable monthly, by applying the following annual rates to the Fund’s net assets determined as of the close of each business day: 0.42% to the portion of the daily net assets not exceeding $500 million; 0.345% to the portion of the daily net assets exceeding $500 million but not exceeding $750 million; 0.295% to the portion of the daily net assets exceeding $750 million but not exceeding $1 billion; 0.27% to the portion of the daily net assets exceeding $1 billion but not exceeding $1.25 billion; 0.245% to the portion of the daily net assets exceeding $1.25 billion but not exceeding $2.5 billion; and 0.22% to the portion of the daily net assets exceeding $2.5 billion.

Morgan Stanley Tax-Exempt Securities Trust

Notes to Financial Statements - June 30, 2009 (unaudited) continued

Pursuant to an Administration Agreement with Morgan Stanley Services Company Inc. (the “Administrator”), an affiliate of the Investment Adviser, the Fund pays an administration fee, accrued daily and payable monthly, by applying the annual rate of 0.08% to the Fund’s daily net assets.

Under an agreement between the Administrator and State Street Bank and Trust Company (“State Street”), State Street provides certain administrative services to the Fund. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

3. Plan of Distribution

Shares of the Fund are distributed by Morgan Stanley Distributors Inc. (the “Distributor”), an affiliate of the Investment Adviser and Administrator. The Fund has adopted a Plan of Distribution (the “Plan”) pursuant to Rule 12b-1 under the Act. The Plan provides that the Fund will pay the Distributor a fee which is accrued daily and paid monthly at the following annual rates: (i) Class A – up to 0.25% of the average daily net assets of Class A shares; (ii) Class B – up to 0.60% of the average daily net assets of Class B shares; and (iii) Class C – up to 0.70% of the average daily net assets of Class C shares.

In the case of Class B shares, provided that the Plan continues in effect, any cumulative expenses incurred by the Distributor but not yet recovered may be recovered through the payment of future distribution fees from the Fund pursuant to the Plan and contingent deferred sales charges paid by investors upon redemption of Class B shares. Although there is no legal obligation for the Fund to pay expenses incurred in excess of payments made to the Distributor under the Plan and the proceeds of contingent deferred sales charges paid by investors upon redemption of shares, if for any reason the Plan is terminated, the Trustees will consider at that time the manner in which to treat such expenses. The Distributor has advised the Fund that such excess amounts totaled $3,703,256 at June 30, 2009.

In the case of Class A shares and Class C shares, expenses incurred pursuant to the Plan in any calendar year in excess of 0.25% or 0.70% of the average daily net assets of Class A or Class C, respectively, will not be reimbursed by the Fund through payments in any subsequent year, except that expenses representing a gross sales credit to Morgan Stanley Financial Advisors and other authorized financial representatives at the time of sale may be reimbursed in the subsequent calendar year. For the six months ended June 30, 2009, the distribution fee was accrued for Class A shares and Class C shares at the annual rate of 0.25% and 0.70%, respectively.

The Distributor has informed the Fund that for the six months ended June 30, 2009, it received contingent deferred sales charges from certain redemptions of the Fund’s Class A shares, Class B shares and Class C shares of $269, $21,421 and $2,178, respectively and received $13,398 in front-end sales charges from sales of the Fund’s Class A shares. The respective shareholders pay such charges which are not an expense of the Fund.

Morgan Stanley Tax-Exempt Securities Trust

Notes to Financial Statements - June 30, 2009 (unaudited) continued

4. Security Transactions and Transactions with Affiliates

The Fund invests in Morgan Stanley Institutional Liquidity Funds – Tax-Exempt Portfolio – Institutional Class, an open-end management investment company managed by an affiliate of the Investment Adviser. Investment advisory fees paid by the Fund are reduced by an amount equal to the advisory and administrative service fees paid by Morgan Stanley Institutional Liquidity Funds – Tax-Exempt Portfolio – Institutional Class with respect to assets invested by the Fund in Morgan Stanley Institutional Liquidity Funds – Tax-Exempt Portfolio – Institutional Class. For the six months ended June 30, 2009, advisory fees paid were reduced by $8,312, relating to the Fund’s investment in Morgan Stanley Institutional Liquidity Funds – Tax-Exempt Portfolio – Institutional Class. Income distributions earned by the Fund are recorded as “dividends from affiliate” in the Statement of Operations and totaled $22,556 for the six months ended June 30, 2009. During the six months ended June 30, 2009, the cost of purchases and sales of investments in Morgan Stanley Institutional Liquidity Funds – Tax-Exempt Portfolio – Institutional Class aggregated $112,447,716 and $127,152,466, respectively.

The cost of purchases and proceeds from sales of portfolio securities, excluding short-term investments, for the six months ended June 30, 2009 aggregated $97,668,587 and $112,638,968, respectively.

Morgan Stanley Trust, an affiliate of the Investment Adviser, Administrator and Distributor, is the Fund’s transfer agent.

The Fund has an unfunded noncontributory defined benefit pension plan covering certain independent Trustees of the Fund who will have served as independent Trustees for at least five years at the time of retirement. Benefits under this plan are based on factors which include years of service and compensation. The Trustees voted to close the plan to new participants and eliminate the future benefits growth due to increases to compensation after July 31, 2003. Aggregate pension costs for the six months ended June 30, 2009, included in “trustees’ fees and expenses” in the Statement of Operations amounted to $6,708. At June 30, 2009, the Fund had an accrued pension liability of $102,915 which is included in “accrued expenses and other payables” in the Statement of Assets and Liabilities.

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

Morgan Stanley Tax-Exempt Securities Trust

Notes to Financial Statements - June 30, 2009 (unaudited) continued

5. Shares of Beneficial Interest

Transactions in shares of beneficial interest were as follows:


	FOR THE SIX						FOR THE YEAR
	MONTHS ENDED						ENDED
	JUNE 30, 2009						DECEMBER 31, 2008
	(unaudited)
	SHARES			AMOUNT			SHARES			AMOUNT
CLASS A SHARES
Sold		1,092,414		$	10,821,167			1,621,221		$	17,257,725
Conversion from Class B		133,048			1,322,939			265,183			2,883,881
Reinvestment of dividends and distributions		329,974			3,283,966			780,955			8,057,150
Redeemed		(1,119,824	)		(11,163,397	)		(3,029,335	)		(31,673,197	)

Net increase (decrease) – Class A		435,612			4,264,675			(361,976	)		(3,474,441	)

CLASS B SHARES
Sold		361,952			3,606,979			760,422			8,179,410
Conversion to Class A		(132,475	)		(1,322,939	)		(264,052	)		(2,883,881	)
Reinvestment of dividends and distributions		89,687			895,647			260,810			2,709,832
Redeemed		(1,181,530	)		(11,781,272	)		(2,179,261	)		(23,071,603	)

Net decrease – Class B		(862,366	)		(8,601,585	)		(1,422,081	)		(15,066,242	)

CLASS C SHARES
Sold		159,279			1,570,689			187,720			1,978,480
Reinvestment of dividends and distributions		43,217			430,403			108,999			1,126,221
Redeemed		(196,091	)		(1,941,017	)		(482,202	)		(5,103,771	)

Net increase (decrease) – Class C		6,405			60,075			(185,483	)		(1,999,070	)

CLASS I SHARES
Sold		154,466			1,530,968			473,440			5,098,306
Reinvestment of dividends and distributions		1,164,266			11,575,273			2,957,046			30,572,791
Redeemed		(3,630,414	)		(36,038,569	)		(10,124,556	)		(105,622,250	)

Net decrease – Class I		(2,311,682	)		(22,932,328	)		(6,694,070	)		(69,951,153	)

Net decrease in Fund		(2,732,031	)	$	(27,209,163	)		(8,663,610	)	$	(90,490,906	)

6. Federal Income Tax Status

The amount of dividends and distributions from net investment income and net realized capital gains are determined in accordance with federal income tax regulations which may differ from generally accepted accounting principles. These “book/tax” differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment; temporary differences do not require reclassification. Dividends and distributions which exceed net investment income and net realized capital gains for tax purposes are reported as distributions of paid-in-capital.

Morgan Stanley Tax-Exempt Securities Trust

Notes to Financial Statements - June 30, 2009 (unaudited) continued

As of December 31, 2008, the Fund had temporary book/tax differences primarily attributable to post-October losses (capital losses incurred after October 31 within the taxable year which are deemed to arise on the first business day of the Fund’s next taxable year), book amortization of discounts on debt securities and mark-to-market of open futures contracts.

7. Expense Offset

The expense offset represents a reduction of the fees and expenses for interest earned on cash balances maintained by the Fund with the transfer agent and custodian. For the six months ended June 30, 2009, the Fund did not have an expense offset.

8. Purposes of and Risks Relating to Certain Financial Instruments

The Fund may invest a portion of its assets in inverse floating rate municipal securities, which are variable debt instruments that pay interest at rates that move in the opposite direction of prevailing interest rates. These investments are typically used by the Fund in seeking to enhance the yield of the portfolio. Inverse floating rate investments tend to underperform the market for fixed rate bonds in a rising interest rate environment, but tend to outperform the market for fixed rate bonds when interest rates decline or remain relatively stable. Inverse floating rate investments have varying degrees of liquidity. Inverse floating rate securities in which the Fund may invest include derivative instruments such as residual interest bonds (“RIBs”) or tender option bonds (“TOBs”). Such instruments are typically created by a special purpose trust that holds long-term fixed rate bonds (which may be tendered by the Fund in certain instances) and sells two classes of beneficial interests: short-term floating rate interests, which are sold to third party investors, and inverse floating residual interests, which are purchased by the Fund. The short-term floating rate interests have first priority on the cash flow from the bonds held by the special purpose trust and the Fund is paid the residual cash flow from the bonds held by the special purpose trust.

The Fund generally invests in inverse floating rate investments that include embedded leverage, thus exposing the Fund to greater risks and increased costs. The market value of a “leveraged” inverse floating rate investment generally will fluctuate in response to changes in market rates of interest to a greater extent than the value of an unleveraged investment. The extent of increases and decreases in the value of inverse floating rate investments generally will be larger than changes in an equal principal amount of a fixed rate security having similar credit quality, redemption provisions and maturity, which may cause the Fund’s net asset value to be more volatile than if it had not invested in inverse floating rate investments.

In certain instances, the short-term floating rate interests created by the special purpose trust may not be able to be sold to third parties or, in the case of holders tendering (or putting) such interests for repayment of principal, may not be able to be remarketed to third parties. In such cases, the special purpose trust holding the long-term fixed rate bonds may be collapsed. In the case of RIBs or TOBs created by the contribution of long-term fixed income bonds by the Fund, the Fund will then be required to repay the principal amount of the tendered

Morgan Stanley Tax-Exempt Securities Trust

Notes to Financial Statements - June 30, 2009 (unaudited) continued

securities. During times of market volatility, illiquidity or uncertainty, the Fund could be required to sell other portfolio holdings at a disadvantageous time to raise cash to meet that obligation.

9. Fair Valuation Measurements

The Fund adopted FASB Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“SFAS 157”), effective January 1, 2008. In accordance with SFAS 157, fair value is defined as the price that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. SFAS 157 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund’s investments. The inputs are summarized in the three broad levels listed below.


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

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

	•	Level 3 — significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

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

Morgan Stanley Tax-Exempt Securities Trust

Notes to Financial Statements - June 30, 2009 (unaudited) continued

The following is a summary of the inputs used as of June 30, 2009 in valuing the Fund’s investments carried at value:


				FAIR VALUE MEASUREMENTS AT JUNE 30 2009 USING
				UNADJUSTED
				QUOTED PRICES IN			SIGNIFICANT		SIGNIFICANT
				ACTIVE MARKET FOR			OTHER OBSERVABLE		UNOBSERVABLE
				IDENTICAL ASSETS			INPUTS		INPUTS
INVESTMENT TYPE	TOTAL			(LEVEL 1)			(LEVEL 2)		(LEVEL 3)
Assets:
Tax-Exempt Municipal Bonds	$	743,819,474			—		$	743,819,474		—
Short-Term Investments
US Government Obligation		1,498,492			—			1,498,492		—
Investment Company		2,567,391		$	2,567,391			—		—

Total Short-Term Investments		4,065,883			2,567,391			1,498,492		—

Futures		689,699			689,699			—		—

Total	$	748,575,056		$	3,257,090		$	745,317,966		—

Liabilities:
Futures	$	(1,541,183	)	$	(1,541,183	)		—		—

10. Derivative Financial Instruments

A derivative financial instrument in very general terms refers to a security whose value is “derived” from the value of an underlying asset, reference rate or index.

The Fund may use derivative instruments for a variety of reasons, such as to attempt to protect the Fund against possible changes in the market value of its portfolio or to generate potential gain. All of the Fund’s portfolio holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation/depreciation. Upon disposition, a realized gain or loss is recognized accordingly, except when taking delivery of a security underlying a contract. In these instances, the recognition of gain or loss is postponed until the disposal of the security underlying the contract. Risk may arise as a result of the potential inability of the counterparties to meet the terms of their contracts.

Summarized below is a specific type of derivative financial instrument used by the Fund:

Futures Contracts To hedge against adverse interest rate changes, the Fund may invest in financial futures contracts or municipal bond index futures contracts (“futures contracts”). These futures contracts involve elements of market risk in excess of the amount reflected in the Statement of Assets and Liabilities. The Fund bears the risk of an unfavorable change in the value of the underlying securities. Risks may also arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts.

Morgan Stanley Tax-Exempt Securities Trust

Notes to Financial Statements - June 30, 2009 (unaudited) continued

Transactions in futures contracts for the six months ended June 30, 2009, were as follows:


	CONTRACTS

Futures outstanding at beginning of the period		8,093
Futures opened		10,624
Futures closed		(16,818	)

Futures outstanding at June 30, 2009		1,899

Interest Rate Swaps The Fund may enter into interest rate swaps and may purchase or sell interest rate caps, floors and collars. The Fund expects to enter into these transactions primarily to manage interest rate risk, hedge portfolio positions and preserve a return or spread on a particular investment or portion of its portfolio. The Fund may also accompany these transactions to protect against any increase in the price of securities the Fund anticipates purchasing at a later date. Interest rate swap transactions are subject to market risk, risk of default by the other party to the transaction, risk of imperfect correlation and manager risk. Such risks may exceed the related amounts shown in the Statement of Assets and Liabilities.

There were no transactions in interest rate swaps for the six months ended June 30, 2009.

The Fund adopted FASB Standard No. 161, Disclosures about Derivative Instruments and Hedging Activities (“SFAS 161”), effective December 1, 2008. SFAS 161 is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund’s financial position and results of operations.

The following table sets forth the fair value of the Fund’s derivative contracts by primary risk exposure as of June 30, 2009.

ASSET DERIVATIVES

LIABILITY DERIVATIVES

PRIMARY RISK EXPOSURE

BALANCE SHEET LOCATION

FAIR VALUE

BALANCE SHEET LOCATION

FAIR VALUE

Interest Rate Risk

Variation margin

689,699†

Variation margin

(1,541,183

)†


†		Includes cumulative appreciation/depreciation of futures contracts as reported in the Portfolio of Investments. Only current day’s variation margin is reported within the Statement of Assets and Liabilities.

Morgan Stanley Tax-Exempt Securities Trust

Notes to Financial Statements - June 30, 2009 (unaudited) continued

The following tables set forth by primary risk exposure the Fund’s realized gains (losses) and change in unrealized gains (losses) by type of derivative contract for the period ended June 30, 2009 in accordance with SFAS 161.


AMOUNT OF REALIZED GAIN (LOSS) ON DERIVATIVE CONTRACTS
PRIMARY RISK EXPOSURE	FUTURES

Interest Rate Risk	$	1,930,865


CHANGE IN UNREALIZED APPRECIATION/ DEPRECIATION ON DERIVATIVE CONTRACTS
PRIMARY RISK EXPOSURE	FUTURES

Interest Rate Risk	$	3,913,659

11. Accounting Pronouncements

On April 9, 2009, FASB issued Staff Position No. 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly (“FSP 157-4”). FSP 157-4 provides additional guidance for estimating fair value in accordance with SFAS 157, when the volume and level of activity for the asset or liability have significantly decreased. FSP 157-4 also requires additional disaggregation of the current SFAS 157 required disclosures. FSP 157-4 is effective for interim and annual reporting periods ending after June 15, 2009. The Fund has adopted the provisions of FSP 157-4 as of June 30, 2009 and it did not have a material impact on the Fund’s financial statements. The disclosures required by FSP 157-4 are included in Note 9 of the financial statements.

In May 2009, FASB issued Statement of Financial Accounting Standards No. 165 (“SFAS 165”), Subsequent Events, which is intended to establish general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. SFAS 165 is effective for interim or annual financial periods ending after June 15, 2009. The Fund has adopted the provisions of SFAS 165 as of June 30, 2009. Although the adoption of SFAS 165 did not materially impact its financial position, results of operations, or changes in net assets, the Fund is now required to provide additional disclosures, which are included in Note 1.

In June 2009, FASB issued SFAS No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles – a replacement of FASB Statement No. 162 (“SFAS 168”). SFAS 168 will become the source of authoritative U.S. Generally Accepted Accounting Principles recognized by the FASB to be applied by nongovernmental entities. Once in effect, all of the Codification’s content will carry the same level of authority, effectively superseding FASB Statement No. 162. SFAS 168 is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The Fund does not anticipate that SFAS 168 will have a material impact on its financial statements.

Morgan Stanley Tax-Exempt Securities Trust

Financial Highlights

Selected ratios and per share data for a share of beneficial interest outstanding throughout each period:


	FOR THE SIX
	MONTHS ENDED			FOR THE YEAR ENDED DECEMBER 31,
	JUNE 30, 2009			2008				2007				2006				2005				2004
	(unaudited)
Class A Shares
Selected Per Share Data:
Net asset value, beginning of period		$9.43			$11.19				$11.56				$11.55				$11.82				$11.97

Income (loss) from investment operations:
Net investment income		0.24			0.48				0.50				0.50				0.52				0.53
Net realized and unrealized gain (loss)		0.60			(1.66	)			(0.34	)			0.08				(0.12	)			(0.09	)

Total income (loss) from investment operations		0.84			(1.18	)			0.16				0.58				0.40				0.44

Less dividends and distributions from:
Net investment income		(0.24	)		(0.48	)			(0.49	)			(0.50	)			(0.51	)			(0.53	)
Net realized gain		—			(0.10	)			(0.04	)			(0.07	)			(0.16	)			(0.06	)

Total dividends and distributions		(0.24	)		(0.58	)			(0.53	)			(0.57	)			(0.67	)			(0.59	)

Net asset value, end of period		$10.03			$9.43				$11.19				$11.56				$11.55				$11.82

Total Return⁽¹⁾		8.86%⁽⁶	⁾		(10.93	)	%		1.42		%		5.19		%		3.46		%		3.82		%
Ratios to Average Net Assets⁽³⁾:
Total expenses (before expense offset)		0.86%⁽⁴	⁾⁽⁷⁾		0.89%⁽⁴	⁾			0.98%⁽⁴	⁾			0.85%⁽²	⁾			0.69		%		0.65		%
Total expenses (before expense offset, exclusive of interest and residual trust expenses)		0.84%⁽⁴	⁾⁽⁷⁾		0.81%⁽⁴	⁾			0.79%⁽⁴	⁾			0.78%⁽²	⁾			0.69		%		0.65		%
Net investment income		4.83%⁽⁴	⁾⁽⁷⁾		4.54%⁽⁴	⁾			4.35%⁽⁴	⁾			4.32%⁽²	⁾			4.39		%		4.48		%
Rebate from Morgan Stanley affiliate		0.00%⁽⁵	⁾⁽⁷⁾		0.00%⁽⁵	⁾			0.00%⁽⁵	⁾			—				—				—
Supplemental Data:
Net assets, end of period, in thousands		$154,444			$141,120				$171,501				$171,530				$162,922				$128,578
Portfolio turnover rate		13%⁽⁶	⁾		12		%		7		%		10		%		17		%		14		%


(1)		Does not reflect the deduction of sales charge. Calculated based on the net asset value as of the last business day of the period.
(2)		Does not reflect the effect of expense offset of 0.01%.
(3)		Reflects overall Fund ratios for investment income and non-class specific expenses.
(4)		The ratios reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliate during the period. The effect of the rebate on the ratios is disclosed in the above table as “Rebate from Morgan Stanley affiliate.”
(5)		Amount is less than 0.005%.
(6)		Not annualized.
(7)		Annualized.

See Notes to Financial Statements

Morgan Stanley Tax-Exempt Securities Trust

Financial Highlights continued


	FOR THE SIX
	MONTHS ENDED			FOR THE YEAR ENDED DECEMBER 31,
	JUNE 30, 2009			2008				2007				2006				2005				2004
	(unaudited)
Class B Shares
Selected Per Share Data:
Net asset value, beginning of period		$9.47			$11.24				$11.61				$11.60				$11.87				$12.02

Income (loss) from investment operations:
Net investment income		0.22			0.45				0.46				0.46				0.47				0.48
Net realized and unrealized gain (loss)		0.61			(1.68	)			(0.34	)			0.08				(0.12	)			(0.09	)

Total income (loss) from investment operations		0.83			(1.23	)			0.12				0.54				0.35				0.39

Less dividends and distributions from:
Net investment income		(0.22	)		(0.44	)			(0.45	)			(0.46	)			(0.46	)			(0.48	)
Net realized gain		—			(0.10	)			(0.04	)			(0.07	)			(0.16	)			(0.06	)

Total dividends and distributions		(0.22	)		(0.54	)			(0.49	)			(0.53	)			(0.62	)			(0.54	)

Net asset value, end of period		$10.08			$9.47				$11.24				$11.61				$11.60				$11.87

Total Return⁽¹⁾		8.75%⁽⁶	⁾		(11.27	)	%		1.07		%		4.82		%		3.00		%		3.34		%
Ratios to Average Net Assets⁽³⁾
Total expenses (before expense offset)		1.21%⁽⁴	⁾⁽⁷⁾		1.25%⁽⁴	⁾			1.34%⁽⁴	⁾			1.21%⁽²	⁾			1.12		%		1.11		%
Total expenses (before expense offset, exclusive of interest and residual trust expenses)		1.19%⁽⁴	⁾⁽⁷⁾		1.17%⁽⁴	⁾			1.15%⁽⁴	⁾			1.14%⁽²	⁾			1.12		%		1.11		%
Net investment income.		4.48%⁽⁴	⁾⁽⁷⁾		4.18%⁽⁴	⁾			3.99%⁽⁴	⁾			3.96%⁽²	⁾			3.96		%		4.02		%
Rebate from Morgan Stanley affiliate		0.00%⁽⁵	⁾⁽⁷⁾		0.00%⁽⁵	⁾			0.00%⁽⁵	⁾			—				—				—
Supplemental Data:
Net assets, end of period, in thousands		$41,087			$46,804				$71,528				$99,514				$127,327				$195,859
Portfolio turnover rate		13%⁽⁶	⁾		12		%		7		%		10		%		17		%		14		%


(1)		Does not reflect the deduction of sales charge. Calculated based on the net asset value as of the last business day of the period.
(2)		Does not reflect the effect of expense offset of 0.01%.
(3)		Reflects overall Fund ratios for investment income and non-class specific expenses.
(4)		The ratios reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliate during the period. The effect of the rebate on the ratios is disclosed in the above table as “Rebate from Morgan Stanley affiliate.”
(5)		Amount is less than 0.005%.
(6)		Not annualized.
(7)		Annualized.

See Notes to Financial Statements

Morgan Stanley Tax-Exempt Securities Trust

Financial Highlights continued


	FOR THE SIX
	MONTHS ENDED			FOR THE YEAR ENDED DECEMBER 31,
	JUNE 30, 2009			2008				2007				2006				2005				2004
	(unaudited)
Class C Shares
Selected Per Share Data:
Net asset value, beginning of period		$9.45			$11.21				$11.57				$11.57				$11.84				$11.99

Income (loss) from investment operations:
Net investment income		0.22			0.44				0.44				0.45				0.45				0.46
Net realized and unrealized gain (loss)		0.58			(1.67	)			(0.32	)			0.07				(0.12	)			(0.09	)

Total income (loss) from investment operations		0.80			(1.23	)			0.12				0.52				0.33				0.37

Less dividends and distributions from:
Net investment income		(0.21	)		(0.43	)			(0.44	)			(0.45	)			(0.44	)			(0.46	)
Net realized gain		—			(0.10	)			(0.04	)			(0.07	)			(0.16	)			(0.06	)

Total dividends and distributions		(0.21	)		(0.53	)			(0.48	)			(0.52	)			(0.60	)			(0.52	)

Net asset value, end of period		$10.04			$9.45				$11.21				$11.57				$11.57				$11.84

Total Return⁽¹⁾		8.50%⁽⁶	⁾		(11.31	)	%		1.04		%		4.63		%		2.89		%		3.24		%
Ratios to Average Net Assets⁽³⁾
Total expenses (before expense offset)		1.31%⁽⁴	⁾⁽⁷⁾		1.35%⁽⁴	⁾			1.44%⁽⁴	⁾			1.31%⁽²	⁾			1.22		%		1.21		%
Total expenses (before expense offset, exclusive of interest and residual trust expenses)		1.29%⁽⁴	⁾⁽⁷⁾		1.27%⁽⁴	⁾			1.25%⁽⁴	⁾			1.24%⁽²	⁾			1.22		%		1.21		%
Net investment income		4.38%⁽⁴	⁾⁽⁷⁾		4.08%⁽⁴	⁾			3.89%⁽⁴	⁾			3.86%⁽²	⁾			3.86		%		3.92		%
Rebate from Morgan Stanley affiliate		0.00%⁽⁵	⁾⁽⁷⁾		0.00%⁽⁵	⁾			0.00%⁽⁵	⁾			—				—				—
Supplemental Data:
Net assets, end of period, in thousands		$22,267			$20,884				$26,864				$29,891				$31,911				$35,265
Portfolio turnover rate		13%⁽⁶	⁾		12		%		7		%		10		%		17		%		14		%


(1)		Does not reflect the deduction of sales charge. Calculated based on the net asset value as of the last business day of the period.
(2)		Does not reflect the effect of expense offset of 0.01%.
(3)		Reflects overall Fund ratios for investment income and non-class specific expenses.
(4)		The ratios reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliate during the period. The effect of the rebate on the ratios is disclosed in the above table as “Rebate from Morgan Stanley affiliate.”
(5)		Amount is less than 0.005%.
(6)		Not annualized.
(7)		Annualized.

See Notes to Financial Statements

Morgan Stanley Tax-Exempt Securities Trust

Financial Highlights continued


	FOR THE SIX
	MONTHS ENDED			FOR THE YEAR ENDED DECEMBER 31,
	JUNE 30, 2009			2008				2007				2006				2005				2004
	(unaudited)
Class I Shares
Selected Per Share Data:
Net asset value, beginning of period		$9.43			$11.19				$11.55				$11.55				$11.82				$11.96

Income (loss) from investment operations:
Net investment income		0.25			0.51				0.52				0.53				0.54				0.55
Net realized and unrealized gain (loss)		0.60			(1.67	)			(0.32	)			0.07				(0.12	)			(0.08	)

Total income (loss) from investment operations		0.85			(1.16	)			0.20				0.60				0.42				0.47

Less dividends and distributions from:
Net investment income		(0.25	)		(0.50	)			(0.52	)			(0.53	)			(0.53	)			(0.55	)
Net realized gain		—			(0.10	)			(0.04	)			(0.07	)			(0.16	)			(0.06	)

Total dividends and distributions		(0.25	)		(0.60	)			(0.56	)			(0.60	)			(0.69	)			(0.61	)

Net asset value, end of period		$10.03			$9.43				$11.19				$11.55				$11.55				$11.82

Total Return⁽¹⁾		8.99%⁽⁶	⁾		(10.71	)	%		1.75		%		5.45		%		3.52		%		4.05		%
Ratios to Average Net Assets⁽³⁾:
Total expenses (before expense offset)		0.61%⁽⁴	⁾⁽⁷⁾		0.65%⁽⁴	⁾			0.74%⁽⁴	⁾			0.61%⁽²	⁾			0.52		%		0.51		%
Total expenses (before expense offset, exclusive of interest and residual trust expenses)		0.59%⁽⁴	⁾⁽⁷⁾		0.57%⁽⁴	⁾			0.55%⁽⁴	⁾			0.54%⁽²	⁾			0.52		%		0.51		%
Net investment income		5.08%⁽⁴	⁾⁽⁷⁾		4.78%⁽⁴	⁾			4.59%⁽⁴	⁾			4.56%⁽²	⁾			4.56		%		4.62		%
Rebate from Morgan Stanley affiliate		0.00%⁽⁵	⁾⁽⁷⁾		0.00%⁽⁵	⁾			0.00%⁽⁵	⁾			—				—				—
Supplemental Data:
Net assets, end of period, in thousands		$531,991			$522,023				$694,439				$793,282				$848,438				$950,792
Portfolio turnover rate		13%⁽⁶	⁾		12		%		7		%		10		%		17		%		14		%


(1)		Calculated based on the net asset value as of the last business day of the period.
(2)		Does not reflect the effect of expense offset of 0.01%.
(3)		Reflects overall Fund ratios for investment income and non-class specific expenses.
(4)		The ratios reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliate during the period. The effect of the rebate on the ratios is disclosed in the above table as “Rebate from Morgan Stanley affiliate.”
(5)		Amount is less than 0.005%.
(6)		Not annualized.
(7)		Annualized.

See Notes to Financial Statements

Morgan Stanley Tax-Exempt Securities Trust

An Important Notice Concerning Our U.S. Privacy Policy (unaudited)

We are required by federal law to provide you with a copy of our Privacy Policy annually.

This Policy applies to individual clients who are current and former advisory clients of certain Morgan Stanley Investment Management’s U.S. investment advisers and to current and former individual investors in certain U.S. mutual funds advised by Morgan Stanley and its affiliates.

This Policy is not applicable to partnerships, corporations, trusts or other non-individual clients or account holders, nor is this Policy applicable to individuals who are either beneficiaries of a trust for which we serve as trustee or participants in an employee benefit plan administered or advised by us. This Policy is, however, applicable to individuals who select us to be a custodian of securities or assets in individual retirement accounts, 401(k) accounts, or accounts subject to the Uniform Gifts to Minors Act.

Please note that we may amend this Policy at any time, and will inform you of any changes to this Policy as required by law.

We Respect Your Privacy

We appreciate that you have provided us with your personal financial information and understand your concerns about safeguarding such information. We strive to maintain the privacy of such information while we help you achieve your financial objectives.

This Policy describes what nonpublic personal information we collect about you, how we collect it, when we may share it with others, and how others may use it. It discusses the steps you may take to limit our sharing of information about you with affiliated Morgan Stanley companies (“other Morgan Stanley companies”), including but not limited to our global financial services affiliates that are part of our integrated securities and investment management business, and our credit services affiliates. It also discloses how you may limit our affiliates’ use of shared information for marketing purposes.

Throughout this Policy, we refer to the nonpublic information that personally identifies you or your accounts as “personal information.”


1.	What Personal Information Do We Collect About You?

To better serve you and manage our business, it is important that we collect and maintain accurate information about you. We obtain this information from applications and other forms you submit to us, from your dealings with us, from consumer reporting agencies and from third parties and other sources.

For example:


•	We collect information such as your name, address, e-mail address, phone number and account title.

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

Morgan Stanley Tax-Exempt Securities Trust

An Important Notice Concerning Our U.S. Privacy Policy continued


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

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


2.	When Do We Disclose Personal Information We Collect About You?

To provide you with the products and services you request, to better serve you, to manage our business and as otherwise required or permitted by law, we may disclose personal information we collect about you to other Morgan Stanley companies and to non-affiliated third parties.

A. Information We Disclose to Other Morgan Stanley Companies. In order to manage your account(s) effectively, including servicing and processing your transactions, to let you know about products and services offered by us and other Morgan Stanley companies, to manage our business, and as otherwise required or permitted by law, we may disclose personal information to other Morgan Stanley companies. Offers for products and services from other Morgan Stanley companies are developed under conditions designed to safeguard your personal information.

B. Information We Disclose to Third Parties. We do not disclose personal information that we collect about you to non-affiliated third parties except to enable them to provide marketing services on our behalf, to perform joint marketing agreements with other financial institutions, and as otherwise required or permitted by law. For example, some instances where we may disclose information about you to third parties include: for servicing and processing transactions, to offer our own products and services, to protect against fraud, for institutional risk control, to respond to judicial process or to perform services on our behalf.

Morgan Stanley recognizes that your relationship with your Financial Advisor is important. If your Financial Advisor’s affiliation with Morgan Stanley ends and he/she joins a non-affiliated securities broker-dealer with which Morgan Stanley has entered into an agreement limiting the use of information, Morgan Stanley will permit your Financial Advisor to retain certain of your contact information, limited to your name, address, e-mail address, phone number and account title.

When we share personal information with a non-affiliated third party, they are required to limit their use of personal information to the particular purpose for which it was shared and they are not allowed to share personal information with others except to fulfill that limited purpose.


3.	How Do We Protect The Security And Confidentiality Of Personal Information We Collect About You?

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

Morgan Stanley Tax-Exempt Securities Trust

An Important Notice Concerning Our U.S. Privacy Policy continued


4.	How Can You Limit The Sharing Of Certain Types Of Personal Information With Other Morgan Stanley Companies?

We respect your privacy and offer you choices as to whether we share with other Morgan Stanley companies personal information that was collected to determine your eligibility for products and services you request (“eligibility information”). Please note that, even if you direct us not to share eligibility information with other Morgan Stanley companies (“opt-out”), we may still share personal information, including eligibility information, with those companies in circumstances excluded from the opt-out under applicable law, such as to process transactions or to service your account. We may also share certain other types of personal information with other Morgan Stanley companies — such as your name, address, telephone number, e-mail address and account number(s), and information about your transactions and experiences with us.


5.	How Can You Limit The Use Of Certain Types Of Personal Information By Other Morgan Stanley Companies For Marketing?

You may limit other Morgan Stanley companies from marketing their products or services to you based on your personal information that they receive from other Morgan Stanley companies. This information includes your income, assets and account history. Your choice to limit marketing offers from other Morgan Stanley companies will apply until you tell us to change your choice.

If you wish to opt-out of sharing and to limit marketing offers, you may do so by:


•	Calling us at 800.350.6414 Monday – Friday between 8 a.m. and 8 p.m. (ET)

•	Writing to us at the following address: Morgan Stanley Privacy Department Harborside Financial Center, Plaza Two, 3rd Floor Jersey City, NJ 07311

If you choose to write to us, your written request should include your name, address, telephone number and account number(s) to which the opt-out applies and should not be sent with any other correspondence. In order to process your request, we require that the request be provided by you directly and not through a third party.

If you have previously notified us about your privacy preferences, it is not necessary to do so again unless you decide to change your preferences. Your opt-out preference will remain in effect with respect to this Policy (as it may be amended) until you notify us otherwise in writing. If you have a joint account, your direction for us not to share this information with other Morgan Stanley companies and for those Morgan Stanley companies not to use your personal information for marketing will be applied to all account holders on that account.

Morgan Stanley Tax-Exempt Securities Trust

An Important Notice Concerning Our U.S. Privacy Policy continued

Please understand that if you opt-out, you and any joint account holders may not receive information about Morgan Stanley products and services that could help you manage your financial resources and achieve your investment objectives.

If you hold more than one account with Morgan Stanley, you may receive multiple privacy policies from us, and would need to follow the directions stated in each particular policy for each account you have with us.

Special Notice To Residents Of Vermont

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

The State of Vermont requires financial institutions to obtain your consent prior to sharing personal information that they collect about you with affiliated companies and non-affiliated third parties other than in certain limited circumstances. Except as permitted by law, we will not share personal information we collect about you with non-affiliated third parties or other Morgan Stanley companies unless you provide us with your written consent to share such information (“opt-in”). If you wish to receive offers for investment products and services offered by or through other Morgan Stanley companies, please notify us in writing at the following address:

Morgan Stanley Privacy Department

Harborside Financial Center, Plaza Two, 3rd Floor

Jersey City, NJ 07311

Your authorization should include your name, address, telephone number and account number(s) to which the opt-in applies and should not be sent with any other correspondence. In order to process your authorization, we require that the authorization be provided by you directly and not through a third-party.

Trustees

Frank L. Bowman

Michael Bozic

Kathleen A. Dennis

James F. Higgins

Dr. Manuel H. Johnson

Joseph J. Kearns

Michael F. Klein

Michael E. Nugent

W. Allen Reed

Fergus Reid

Officers

Michael E. Nugent

Chairperson of the Board

Randy Takian

President and Principal Executive Officer

Kevin Klingert

Vice President

Carsten Otto

Chief Compliance Officer

Stefanie V. Chang Yu

Vice President

Francis J. Smith

Treasurer and Chief Financial Officer

Mary E. Mullin

Secretary

Transfer Agent

Morgan Stanley Trust

Harborside Financial Center, Plaza Two

Jersey City, New Jersey 07311

Independent Registered Public Accounting Firm

Deloitte & Touche LLP

Two World Financial Center

New York, New York 10281

Legal Counsel

Clifford Chance US LLP

31 West 52nd Street

New York, New York 10019

Counsel to the Independent Trustees

Kramer Levin Naftalis & Frankel LLP

1177 Avenue of the Americas

New York, New York 10036

Investment Adviser

Morgan Stanley Investment Advisors Inc.

522 Fifth Avenue

New York, New York 10036

The financial statements included herein have been taken from the records of the Fund without examination by the independent auditors and accordingly they do not express an opinion thereon.

This report is submitted for the general information of the shareholders of the Fund. For more detailed information about the Fund, its fees and expenses and other pertinent information, please read its Prospectus. The Fund’s Statement of Additional Information contains additional information about the Fund, including its trustees. It is available, without charge, by calling (800) 869-NEWS.

This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective Prospectus. Read the Prospectus carefully before investing.

Morgan Stanley Distributors Inc., member FINRA.

INVESTMENT MANAGEMENT

Morgan Stanley

Tax-Exempt Securities Trust

Semiannual
Report

June 30, 2009

TAXSAN

IU09-03543P-Y06/09

TABLE OF CONTENTS


	Item 1 — Report to Shareholders
	Item 2. Code of Ethics
	Item 3. Audit Committee Financial Expert
	Item 4. Principal Accountant Fees and Services
	Item 5. Audit Committee of Listed Registrants
	Item 6
	Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
	Item 8. Portfolio Managers of Closed-End Management Investment Companies
	Item 9. Closed-End Fund Repurchases
	Item 10. Submission of Matters to a Vote of Security Holders
	Item 11. Controls and Procedures
	Item 12. Exhibits
SIGNATURES

Item 2. Code of Ethics.

Not applicable for semiannual reports.

Item 3. Audit Committee Financial Expert.

Not applicable for semiannual reports.

Item 4. Principal Accountant Fees and Services

Not applicable for semiannual reports.

Item 5. Audit Committee of Listed Registrants.

Not applicable for semiannual reports.

Item 6.

(a) Refer to Item 1.

(b) Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable for semiannual reports.

Item 8. Portfolio Managers of Closed-End Management Investment Companies

Applicable only to reports filed by closed-end funds.

Item 9. Closed-End Fund Repurchases

Applicable to reports filed by closed-end funds.

Item 10. Submission of Matters to a Vote of Security Holders

Not applicable.

Item 11. Controls and Procedures

(a) The Fund’s principal executive officer and principal financial officer have concluded that the Fund’s disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Fund in this Form N-CSR was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, based upon such officers’ evaluation of these controls and procedures as of a date within 90 days of the filing date of the report.

(b) There were no changes in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12. Exhibits

(a) Code of Ethics – Not applicable for semiannual reports.

(b) A separate certification for each principal executive officer and principal financial officer of the registrant are attached hereto as part of EX-99.CERT.


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