American Century California Tax-Free & Municipal Funds

PROSPECTUS SUPPLEMENT

CALIFORNIA HIGH-YIELD MUNICIPAL FUND
(A CLASS/B CLASS/C CLASS)

Supplement dated March 31, 2005 * Prospectus dated January 1, 2005

THE FOLLOWING REPLACES THE SECOND PARAGRAPH UNDER Service, Distribution and
Administrative Fees ON PAGE 25.

    Certain financial intermediaries perform recordkeeping and administrative
    services for their clients that would otherwise be performed by American
    Century's transfer agent. In some circumstances, the advisor will pay such
    service providers a fee for performing those services. Also, the advisor and
    the funds' distributor may make payments for various additional services or
    other expenses out of their profits or other available sources. Such
    payments may be made for one or more of the following: (1) distribution
    services, which include expenses incurred by intermediaries for their sales
    activities with respect to the funds, such as preparing, printing and
    distributing sales literature and advertising materials and compensating
    registered representatives or other employees of such intermediary for their
    sales activities, (2) shareholder services, such as providing individual and
    custom investment advisory services to clients of the intermediary; and (3)
    marketing and promotional services, including business planning assistance,
    educating personnel about the funds, and sponsorship of sales meetings,
    which may include covering costs of providing speakers, meals and other
    entertainment. The distributor may sponsor seminars and conferences designed
    to educate intermediaries about the funds and may cover the expenses
    associated with attendance at such meetings, including travel costs. These
    payments and activities are intended to provide an incentive to
    intermediaries to sell the funds by ensuring that they are educated about
    the funds, and to help such intermediaries defray costs associated with
    offering the funds. The amount of any payments described by this paragraph
    is determined by the advisor or the distributor, and all such amounts are
    paid out of the available assets of the advisor and distributor, and not by
    you or the funds. As a result, the total expense ratio of the funds will not
    be affected by any such payments.

SH-SPL-42741   0503








American Century California Tax-Free & Municipal Funds

PROSPECTUS SUPPLEMENT

CALIFORNIA HIGH-YIELD MUNICIPAL FUND
(INVESTOR CLASS)

Supplement dated March 31, 2005 * Prospectus dated January 1, 2005

THE FOLLOWING REPLACES THE THIRD PARAGRAPH UNDER Investing through Financial
Intermediaries ON PAGE 18.

    Certain financial intermediaries perform recordkeeping and administrative
    services for their clients that would otherwise be performed by American
    Century's transfer agent. In some circumstances, the advisor will pay such
    service providers a fee for performing those services. Also, the advisor and
    the funds' distributor may make payments for various additional services or
    other expenses out of their profits or other available sources. Such
    payments may be made for one or more of the following: (1) distribution
    services, which include expenses incurred by intermediaries for their sales
    activities with respect to the funds, such as preparing, printing and
    distributing sales literature and advertising materials and compensating
    registered representatives or other employees of such intermediary for their
    sales activities, (2) shareholder services, such as providing individual and
    custom investment advisory services to clients of the intermediary; and (3)
    marketing and promotional services, including business planning assistance,
    educating personnel about the funds, and sponsorship of sales meetings,
    which may include covering costs of providing speakers, meals and other
    entertainment. The distributor may sponsor seminars and conferences designed
    to educate intermediaries about the funds and may cover the expenses
    associated with attendance at such meetings, including travel costs. These
    payments and activities are intended to provide an incentive to
    intermediaries to sell the funds by ensuring that they are educated about
    the funds, and to help such intermediaries defray costs associated with
    offering the funds. The amount of any payments described by this paragraph
    is determined by the advisor or the distributor, and all such amounts are
    paid out of the available assets of the advisor and distributor, and not by
    you or the funds. As a result, the total expense ratio of the funds will not
    be affected by any such payments.

SH-SPL-42941   0503