SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549

FORM N-17f-2

Certificate of Accounting of Securities and Similar
Investments in the Custody of
Management Investment Companies

Pursuant to Rule 17f-2 [17 CFR 270.17f-2]

1.    Investment Company Act File Number:    Date examination completed:

               811-3218                             1/22/2002

2. State identification Number:

AL       AK       AZ       AR       CA      CO
CT       DE       DC       FL       GA      HI
ID       IL       IN       IA       KS      KY
LA       ME       MD       MA       MI      MN
MS       MO       MT       NE       NV      NH
NJ       NM       NY       NC       ND      OH
OK       OR       PA       RI       SC      SD
TN       TX       UT       VT       VA      WA
WV       WI       WY       PUERTO RICO

Other  (specify):

3. Exact name of investment company as specified in registration statement:

     AXP Variable Portfolio - Investment Series, Inc.

4. Address of principal executive office (number,street,city,state,zip code):

     200 AXP Financial Center, Minneapolis, MN 55474

INSTRUCTIONS

This Form must be completed by investment companies that have custody of
securities or similar investments.

Investment Company

1.   All items must be completed by the investment company.

2.   Give this Form to the independent public accountant who, in compliance with
     Rule 17f-2 under the Act and applicable state law, examines  securities and
     similar investments in the custody of the investment company.

Accountant

3.   Submit this Form to the Securities and Exchange  Commission and appropriate
     state securities  administrators  when filing the certificate of accounting
     required by Rule 17f-2  under the Act and  applicable  state law.  File the
     original  and one  copy  with  the  Securities  and  Exchange  Commission's
     principal  office in Washington,  D. C., one copy with the regional  office
     for the  region  in  which  the  investment  company's  principal  business
     operations  are  conducted,   and  one  copy  with  the  appropriate  state
     administrator(s), if applicable.

          THIS FORM MUST BE GIVEN TO YOUR INDEPENDENT PUBLIC ACCOUNTANT



                          Independent Auditors' Report


To the Board of Directors of
AXP Variable Portfolio - Investment Series, Inc.:

We have examined management's assertion, included in the accompanying Management
Statement Regarding Compliance with Certain Provisions of the Investment Company
Act of 1940, that AXP Variable Portfolio - Capital Resource Fund, AXP Variable
Portfolio - International Fund, AXP Variable Portfolio - Strategy Aggressive
Fund, AXP Variable Portfolio - Blue Chip Advantage Fund, AXP Variable Portfolio
- - Growth Fund, AXP Variable Portfolio - Small Cap Advantage Fund, AXP Variable
Portfolio - New Dimensions Fund, AXP Variable Portfolio - Equity Select Fund,
AXP Variable Portfolio - Emerging Markets Fund, AXP Variable Portfolio - Stock
Fund, and AXP Variable Portfolio - S & P 500 Index Fund of AXP Variable
Portfolio - Investment Series, Inc. (the Funds) complied with the provisions of
subsection (b) and (c) of Rule 17f-2 under the Investment Company Act of 1940 as
of October 31, 2001 and during the period August 31, 2001 (the date of our last
examination) through October 31, 2001. Management is responsible for the Funds'
compliance with those provisions. Our responsibility is to express an opinion on
management's assertion about the Funds' compliance based on our examination.

Our examination was made in accordance with standards established by the
American Institute of Certified Public Accountants and, accordingly, included
examining, on a test basis, evidence about the Funds' compliance with those
requirements and performing such other procedures as we considered necessary in
the circumstances. Included among our procedures were the following tests
performed as of October 31, 2001 and the period from August 31, 2001 through
October 31, 2001, with respect to securities transactions:

o    Count and inspection of all securities located in the vault, if any, of
     American Express Trust Company, the Custodian without prior notice to
     management;

o    Confirmation of all securities,  if any, held by institutions in book entry
     form  (Wells  Fargo Bank  Minnesota,  N.A.,  The Bank of New York,  and The
     Depository Trust Company);

o    Confirmation or examination of underlying documentation of all securities
     purchased but not received, hypothecated, pledged, placed in escrow, or out
     for transfer with brokers, pledges and/or transfer agents;

o    Reconciliation of all such securities to the books and records of the Funds
     and the Custodian; and

o    Test of selected security transactions since the date of our last report.



We believe that our examination provides a reasonable basis for our opinion. Our
examination does not provide a legal determination on the Funds' compliance with
the specified requirements.

In our opinion, management's assertion that the Funds were in compliance with
the above mentioned provisions of Rule 17f-2 of the Investment Company Act of
1940 as of October 31, 2001 and for the period from August 31, 2001 through
October 31, 2001 is fairly stated in all material respects.

This report is intended solely for the information and use of management of the
Funds and the Securities and Exchange Commission and should not be used for any
other purpose and is not intended to be and should not be used by anyone other
than these specified parties.




/s/ KPMG LLP
- ------------
    KPMG LLP
    Minneapolis, MN
    January 22, 2002


             Management Statement Regarding Compliance With Certain
                Provisions of the Investment Company Act of 1940



     We, as members of management of AXP Variable Portfolio - Capital Resource
     Fund, AXP Variable Portfolio - International Fund, AXP Variable Portfolio -
     Strategy Aggressive Fund, AXP Variable Portfolio - Blue Chip Advantage
     Fund, AXP Variable Portfolio - Growth Fund, AXP Variable Portfolio - Small
     Cap Advantage Fund, AXP Variable Portfolio - New Dimensions Fund, AXP
     Variable Portfolio - Equity Select Fund, AXP Variable Portfolio - Emerging
     Markets Fund, AXP Variable Portfolio - Stock Fund, and AXP Variable
     Portfolio - S & P 500 Index Fund of AXP Variable Portfolio - Investment
     Series, Inc. (the Funds) are responsible for complying with the
     requirements of subsections (b) and (c) of Rule 17f-2, Custody of
     Investments by Registered Management Investment Companies, of the
     Investment Company Act of 1940. We are also responsible for establishing
     and maintaining effective internal controls over compliance with those
     requirements. We have performed an evaluation of the Funds' compliance with
     the requirements of subsections (b) and (c) of Rule 17f-2 as of October 31,
     2001 and from August 31, 2001 through October 31, 2001.

     Based on this evaluation, we assert that the Funds were in compliance with
     the requirements of subsections (b) and (c) of Rule 17f-2 of the Investment
     Company Act of 1940 as of October 31, 2001 and from August 31, 2001 through
     October 31, 2001, with respect to securities reflected in the investment
     account of the Funds.



     AMERICAN EXPRESS FINANCIAL CORPORATION

By:/s/ John M. Knight
   ------------------
       John M. Knight, Vice President-Investment Accounting