Hilliard-Lyons Government Fund, Inc.
                        Prospectus Dated January 1, 2005

                         Supplement Dated June 28, 2005

The following information supplements the information in the section of the
Prospectus entitled "Shareholder Information."

        Frequent Purchases and Redemptions. The Fund seeks to maintain a stable
net asset value of one dollar per share and daily liquidity. Since the Fund is
often used by shareholders for short-term investments and immediate cash needs,
it is designed to accommodate frequent purchases and redemptions. The Fund does
not anticipate that frequent purchases and redemptions, under normal
circumstances, will have significant adverse consequences to the Fund or its
shareholders. Therefore, the Fund's Board of Directors has not adopted policies
or procedures regarding frequent trading of Fund shares. The Fund reserves the
right, in its sole discretion, to withdraw all or any part of the offering made
by the Fund's prospectus or to reject purchase orders when in the judgment of
management, such withdrawal or rejection is in the best interests of the Fund
and its shareholders.



                      Hilliard-Lyons Government Fund, Inc.
            Statement of Additional Information Dated January 1, 2005

                         Supplement Dated June 28, 2005

The following information replaces the last sentence in the last paragraph in
the section of the Statement of Additional Information entitled Investment
Objectives and Policies, which ends on page 5.

Portfolio Holdings

        The Board of Directors has adopted policies and procedures designed to
protect the confidentiality of the Fund's portfolio holdings and to prevent the
selective disclosure of non-public information about such holdings. These
policies and procedures apply to the Fund's officers and directors and to its
investment adviser and principal underwriter and its officers, directors,
employees and agents.

        Pursuant to these policies and procedures, information about the Fund's
portfolio holdings may be disclosed to unaffiliated third parties under the
following circumstances:

        .       The Fund will publicly disclose its portfolio holdings in
                accordance with regulatory requirements, such as periodic
                portfolio disclosure in filings with the U.S. Securities and
                Exchange Commission.

        .       The Fund may disclose portfolio information in response to
                requests from regulators or valid subpoenas.

        .       The Fund may disclose any and all portfolio information to any
                of its service providers if:

                1)      the service provider generally needs access to portfolio
                        information to perform its contractual duties and
                        responsibilities and

                2)      the service provider is subject to duties of
                        confidentiality, including a duty not to trade on
                        non-public information. "Duties of confidentiality"
                        include provisions of confidentiality included in
                        written agreements, implied by the nature of the
                        relationship (such as attorney-client privilege" or
                        required by fiduciary or regulatory principles (such as
                        custody services provided by financial institutions).

        These service providers include: the Fund's custodian, its independent
registered public accounting firm, legal counsel to the Fund, any financial
printer providing services to the Fund, independent legal counsel to the Fund's
Independent Directors, and any other service provider that the Fund's Treasurer
determines meets the criteria set forth above.

        The Fund's Treasurer must approve any exception to these policies and
procedures. Any such exception must be based on a legitimate business purpose of
the Fund and must be in the best interest of the Fund and its shareholders. Any
party to such an exception must execute a confidentiality agreement. No
compensation or other consideration may be received by the Fund or its
investment adviser in connection with such exception.

        The Treasurer will report, at least annually, to the Board on matters
related to these policies and procedures.