N-CSRS

                                  United States
                       Securities and Exchange Commission
                             Washington, D.C. 20549

                                   Form N-CSR
   Certified Shareholder Report of Registered Management Investment Companies


                                    811-3947

                      (Investment Company Act File Number)


              Federated U.S. Government Securities Fund: 1-3 Years
         ---------------------------------------------------------------

               (Exact Name of Registrant as Specified in Charter)



                            Federated Investors Funds
                              5800 Corporate Drive
                       Pittsburgh, Pennsylvania 15237-7000


                                 (412) 288-1900
                         (Registrant's Telephone Number)


                           John W. McGonigle, Esquire
                            Federated Investors Tower
                               1001 Liberty Avenue
                       Pittsburgh, Pennsylvania 15222-3779
                     (Name and Address of Agent for Service)
                (Notices should be sent to the Agent for Service)



                        Date of Fiscal Year End: 2/28/05


               Date of Reporting Period: Six months ended 8/31/04



Item 1.     Reports to Stockholders

Federated
World-Class Investment Manager

Federated U.S. Government Securities Fund: 1-3 Years

SEMI-ANNUAL SHAREHOLDER REPORT

August 31, 2004

Institutional Shares
Institutional Service Shares
Class Y Shares

FINANCIAL HIGHLIGHTS
SHAREHOLDER EXPENSE EXAMPLE
PORTFOLIO OF INVESTMENTS SUMMARY TABLES
FINANCIAL STATEMENTS
VOTING PROXIES ON FUND PORTFOLIO SECURITIES
QUARTERLY PORTFOLIO SCHEDULE

Not FDIC Insured * May Lose Value * No Bank Guarantee

Financial Highlights - Institutional Shares

(For a Share Outstanding Throughout Each Period)

	Six Months Ended (unaudited)			Year Ended February 28 or 29,
	8/31/2004			2004			2003			2002			2001			2000
Net Asset Value, Beginning of Period	$10.77			$10.82			$10.70			$10.53			$10.28			$10.44
Income From Investment Operations:
Net investment income	0.10			0.20			0.31			0.46			0.60			0.50
Net realized and unrealized gain (loss) on investments	(0.08	)		(0.05	)		0.12			0.17			0.25			(0.16	)
TOTAL FROM INVESTMENT OPERATIONS	0.02			0.15			0.43			0.63			0.85			0.34
Less Distributions:
Distributions from net investment income	(0.10	)		(0.20	)		(0.31	)		(0.46	)		(0.60	)		(0.50	)
Net Asset Value, End of Period	$10.69			$10.77			$10.82			$10.70			$10.53			$10.28
Total Return 1	0.16	%		1.40	%		4.10	%		6.07	%		8.51	%		3.29	%
Ratios to Average Net Assets:
Expenses	0.54	% 2		0.54	%		0.54	%		0.54	%		0.54	%		0.54	%
Net investment income	1.81	% 2		1.86	%		2.88	%		4.34	%		5.76	%		4.81	%
Expense waiver/reimbursement 3	0.28	% 2		0.26	%		0.27	%		0.27	%		0.25	%		0.28	%
Supplemental Data:
Net assets, end of period (000 omitted)	$501,547		$356,449			$456,096			$365,090			$399,582			$461,506
Portfolio turnover	81	%		81	%		76	%		99	%		129	%		171	%

1 Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods of less than one year are not annualized.

2 Computed on an annualized basis.

3 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.

See Notes which are an integral part of the Financial Statements

Financial Highlights - Institutional Service Shares

(For a Share Outstanding Throughout Each Period)

	Six Months Ended (unaudited)		Year Ended February 28 or 29,
	8/31/2004		2004		2003		2002		2001		2000
Net Asset Value, Beginning of Period	$10.77		$10.82		$10.70		$10.53		$10.28		$10.44
Income From Investment Operations:
Net investment income	0.08		0.17		0.28		0.43		0.57		0.48
Net realized and unrealized gain (loss) on investments	(0.08	)	(0.05	)	0.13		0.17		0.25		(0.17	)
TOTAL FROM INVESTMENT OPERATIONS	0.00		0.12		0.41		0.60		0.82		0.31
Less Distributions:
Distributions from net investment income	(0.08	)	(0.17	)	(0.29	)	(0.43	)	(0.57	)	(0.47	)
Net Asset Value, End of Period	$10.69		$10.77		$10.82		$10.70		$10.53		$10.28
Total Return 1	0.04	%	1.14	%	3.84	%	5.81	%	8.25	%	3.03	%
Ratios to Average Net Assets:
Expenses	0.79	% 2	0.79	%	0.79	%	0.79	%	0.79	%	0.79	%
Net investment income	1.55	% 2	1.61	%	2.63	%	4.04	%	5.55	%	4.48	%
Expense waiver/reimbursement 3	0.28	% 2	0.26	%	0.27	%	0.27	%	0.25	%	0.28	%
Supplemental Data:
Net assets, end of period (000 omitted)	$46,802		$53,608		$82,109		$66,642		$55,233		$29,255
Portfolio turnover	81	%	81	%	76	%	99	%	129	%	171	%

1 Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods of less than one year are not annualized.

2 Computed on an annualized basis.

3 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.

See Notes which are an integral part of the Financial Statements

Financial Highlights - Class Y Shares

(For a Share Outstanding Throughout Each Period)

	Six Months Ended (unaudited)		Year Ended February 28 or 29,
	8/31/2004		2004		2003		2002 1
Net Asset Value, Beginning of Period	$10.77		$10.82		$10.70		$10.60
Income From Investment Operations:
Net investment income	0.11		0.23		0.34		0.25
Net realized and unrealized gain (loss) on investments	(0.08	)	(0.05	)	0.12		0.10
TOTAL FROM INVESTMENT OPERATIONS	0.03		0.18		0.46		0.35
Less Distributions:
Distributions from net investment income	(0.11	)	(0.23	)	(0.34	)	(0.25	)
Net Asset Value, End of Period	$10.69		$10.77		$10.82		$10.70
Total Return 2	0.29	%	1.64	%	4.35	%	3.32	%
Ratios to Average Net Assets:
Expenses	0.30	% 3	0.30	%	0.30	%	0.30	% 3
Net investment income	2.05	% 3	2.07	%	3.12	%	4.03	% 3
Expense waiver/reimbursement 4	0.27	% 3	0.25	%	0.26	%	0.26	% 3
Supplemental Data:
Net assets, end of period (000 omitted)	$136,887		$130,725		$100,036		$75,240
Portfolio turnover	81	%	81	%	76	%	99	%

1 Reflects operations for the period from August 1, 2001 (date of initial public investment) to February 28, 2002.

2 Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods of less than one year are not annualized.

3 Computed on an annualized basis.

4 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.

See Notes which are an integral part of the Financial Statements

Shareholder Expense Example

As a shareholder of the Fund, you incur ongoing costs, including management fees, distribution (12b-1) fees, shareholder services 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. It is based on an investment of $1,000 invested at the beginning of the period and held for the entire six-month period ended August 31, 2004.

ACTUAL EXPENSES

The first section of the table below provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you incurred 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 section under the heading entitled "Expenses Paid During Period" to estimate the expenses attributable to your investment during this period.

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES

The second section of the table below provides information about hypothetical account values and 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. Thus, you should not use the hypothetical account values and expenses to estimate the actual ending account balance or your expenses for the period. Rather, these figures are provided to enable you to compare the ongoing costs 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. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.

	Beginning Account Value 3/1/2004	Ending Account Value 8/31/2004	Expenses Paid During Period 1
Actual:
Institutional Shares	$1,000	$1,001.60	$2.72
Institutional Service Shares	$1,000	$1,000.40	$3.98
Class Y Shares	$1,000	$1,002.90	$1.51
Hypothetical (assuming a 5% return before expenses):
Institutional Shares	$1,000	$1,022.48	$2.75
Institutional Service Shares	$1,000	$1,021.22	$4.02
Class Y Shares	$1,000	$1,023.69	$1.53

1 Expenses are equal to the Federated U.S. Government Securities Fund: 1-3 Years Institutional Shares, Institutional Service Shares and Class Y Shares annualized expense ratios of 0.54%, 0.79%, and 0.30% respectively, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

Portfolio of Investments Summary Tables

At August 31, 2004, the fund's portfolio composition ¹ was as follows:

		Percentage of Total Investments 2
U.S. Treasury Securities	66.5%
U.S. Government Agency Securities	14.1%
Repurchase Agreements	19.4%
TOTAL		100%

At August 31, 2004, the fund's effective maturity ³ schedule was as follows:

Securities With an Effective Maturity of		Percentage of Total Investments 2
Less than 1 Year Securities	25.1%
1-3 Year Securities	74.9%
TOTAL		100%

1 See the fund's prospectus for a more complete description of the principal types of securities in which the fund invests.

2 Percentages are based on total investments, which may differ from total net assets.

3 For investments subject to prepayment "effective maturity" is the unexpired period until the earliest date the investment is subject to change in accordance with market rates, subject to prepayment or repurchase by the issuer (if the market value of the investment indicates an expectation that the investment will be prepaid or repurchased). For adjustable rate investments "effective maturity" is the unexpired period until the date of the earliest interest rate adjustment. For all other investments "effective maturity" is the unexpired period until final maturity.

Portfolio of Investments

August 31, 2004 (unaudited)

Principal Amount					Value
			U.S. TREASURY NOTES--80.1%
$	20,000,000		7.875%, 11/15/2004	$	20,244,600
	15,000,000	1	2.000%, 8/31/2005		15,007,050
	25,000,000	1	1.625%, 9/30/2005		24,906,250
	100,000,000		1.625%, 10/31/2005		99,547,000
	38,000,000	1	5.750%, 11/15/2005		39,668,580
	12,400,000		5.875%, 11/15/2005		12,961,844
	25,000,000	1	1.875%, 11/30/2005		24,941,500
	22,000,000		1.875%, 12/31/2005		21,931,360
	10,000,000	1	1.875%, 1/31/2006		9,960,900
	60,000,000		1.500%, 3/31/2006		59,334,600
	15,000,000	1	2.250%, 4/30/2006		14,997,600
	9,500,000	1	4.625%, 5/15/2006		9,871,070
	10,000,000	1	2.500%, 5/31/2006		10,034,400
	21,000,000	1	2.750%, 6/30/2006		21,160,860
	25,485,000		7.000%, 7/15/2006		27,635,424
	41,000,000	1	2.375%, 8/15/2006		40,980,730
	28,000,000	1	2.625%, 11/15/2006		28,083,160
	23,000,000	1	3.500%, 11/15/2006		23,499,560
	24,000,000	1	3.125%, 5/15/2007		24,288,720
	20,000,000		2.750%, 8/15/2007		20,003,200
			TOTAL U.S. TREASURY NOTES (IDENTIFIED COST $547,739,634)		549,058,408
Principal Amount					Value
			GOVERNMENT AGENCIES--17.0%
			Federal Home Loan Bank System--13.3%
$	12,000,000		3.875%, 12/15/2004	$	12,074,400
	15,000,000		4.375%, 2/15/2005		15,171,900
	23,750,000		2.250%, 5/15/2006		23,680,412
	40,000,000		2.875%, 8/15/2006		40,231,200
			TOTAL		91,157,912
			Federal Home Loan Mortgage Corp.--3.7%
	25,300,000		2.375%, 4/15/2006		25,296,205
	180,000	1	3.500%, 9/15/2007		182,425
			TOTAL		25,478,630
			TOTAL GOVERNMENT AGENCIES (IDENTIFIED COST $116,010,073)		116,636,542
			REPURCHASE AGREEMENTS--23.4%
	35,896,000		Interest in $500,000,000 joint repurchase agreement with Greenwich Capital Markets, Inc., 1.610%, dated 8/31/2004, to be repurchased at $35,897,605 on 9/1/2004, collateralized by U.S. Government Agency Obligations with various maturities to 1/25/2042, collateral market value $515,000,807		35,896,000
	50,000,000		Interest in $500,000,000 joint repurchase agreement with Citigroup Global Markets, Inc., 1.610%, dated 8/31/2004, to be repurchased at $50,002,236 on 9/1/2004, collateralized by U.S. Government Agency Obligations with various maturities to 8/1/2034, collateral market value $513,386,591 (held as collateral for securities lending)		50,000,000
	73,999,000		Interest in $700,000,000 joint repurchase agreement with Bear Stearns and Co., Inc., 1.610%, dated 8/31/2004, to be repurchased at $74,002,309 on 9/1/2004, collateralized by U.S. Government Agency Obligations with various maturities to 8/15/2034, collateral market value $721,001,005 (held as collateral for securities lending)		73,999,000
			TOTAL REPURCHASE AGREEMENTS (AT AMORTIZED COST)		159,895,000
			TOTAL INVESTMENTS--120.5% (IDENTIFIED COST $823,644,707) 2		825,589,950
			OTHER ASSETS AND LIABILITIES - NET--(20.5)%		(140,353,266	)
			TOTAL NET ASSETS--100%	$	685,236,684

1 Certain principal amounts are temporarily on loan to unaffiliated broker/dealers.

2 The cost of investments for federal tax purposes amounts to $823,644,707.

Note: The categories of investments are shown as a percentage of total net assets at August 31, 2004.

See Notes which are an integral part of the Financial Statements

Statement of Assets and Liabilities

August 31, 2004 (unaudited)

Assets:
Investments in securities	$	665,694,950
Investments in repurchase agreements		159,895,000
Total investments in securities, at value including $120,792,748 of securities loaned (identified cost $823,644,707)			$	825,589,950
Cash				245
Income receivable				4,617,180
Receivable for shares sold				196,174
TOTAL ASSETS				830,403,549
Liabilities:
Payable for investments purchased		20,031,658
Payable for shares redeemed		720,025
Income distribution payable		277,342
Payable for collateral due to broker		123,999,000
Payable for Directors'/Trustees' fees		317
Payable for distribution services fee (Note 5)		10,067
Payable for shareholder services fee (Note 5)		80,628
Accrued expenses		47,828
TOTAL LIABILITIES				145,166,865
Net assets for 64,100,691 shares outstanding			$	685,236,684
Net Assets Consist of:
Paid-in capital			$	686,985,830
Net unrealized appreciation of investments				1,945,243
Accumulated net realized loss on investments				(3,695,470	)
Undistributed net investment income				1,081
TOTAL NET ASSETS			$	685,236,684
Net Asset Value, Offering Price and Redemption Proceeds Per Share
Institutional Shares:
$501,547,050 ÷ 46,916,365 shares outstanding, no par value, unlimited shares authorized				$10.69
Institutional Service Shares:
$46,802,247 ÷ 4,378,312 shares outstanding, no par value, unlimited shares authorized				$10.69
Class Y Shares:
$136,887,387 ÷ 12,806,014 shares outstanding, no par value, unlimited shares authorized				$10.69

See Notes which are an integral part of the Financial Statements

Statement of Operations

Six Months Ended August 31, 2004 (unaudited)

Investment Income:
Interest (including income on securities loaned of $74,942)						$	5,979,020
Expenses:
Investment adviser fee (Note 5)			$	1,016,372
Administrative personnel and services fee (Note 5)				203,445
Custodian fees				11,215
Transfer and dividend disbursing agent fees and expenses (Note 5)				93,171
Directors'/Trustees' fees				7,305
Auditing fees				8,763
Legal fees				2,907
Portfolio accounting fees				58,571
Distribution services fee--Institutional Service Shares (Note 5)				63,859
Shareholder services fee--Institutional Shares (Note 5)				403,422
Shareholder services fee--Institutional Service Shares (Note 5)				63,859
Share registration costs				29,757
Printing and postage				22,144
Insurance premiums				9,905
Miscellaneous				8,497
TOTAL EXPENSES				2,003,192
Waivers (Note 5):
Waiver of investment adviser fee	$(679,399	)
Waiver of administrative personnel and services fee	(9,827	)
Waiver of transfer and dividend disbursing agent fees and expenses	(8,096	)
Waiver of shareholder services fee--Institutional Shares	(16,137	)
Waiver of shareholder services fee--Institutional Service Shares	(2,554	)
TOTAL WAIVERS				(716,013	)
Net expenses							1,287,179
Net investment income							4,691,841
Realized and Unrealized Gain (Loss) on Investments:
Net realized loss on investments							(1,904,851	)
Net change in unrealized appreciation of investments							(2,022,479	)
Net realized and unrealized loss on investments							(3,927,330	)
Change in net assets resulting from operations						$	764,511

See Notes which are an integral part of the Financial Statements

Statement of Changes in Net Assets

	Six Months Ended (unaudited) 8/31/2004			Year Ended 2/28/2004
Increase (Decrease) in Net Assets
Operations:
Net investment income	$	4,691,841		$	11,513,762
Net realized gain (loss) on investments		(1,904,851	)		3,147,251
Net change in unrealized appreciation/depreciation of investments		(2,022,479	)		(5,941,291	)
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS		764,511			8,719,722
Distributions to Shareholders:
Distributions from net investment income
Institutional Shares		(2,918,467	)		(7,823,775	)
Institutional Service Shares		(395,997	)		(1,113,019	)
Class Y Shares		(1,375,959	)		(2,575,416	)
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS		(4,690,423	)		(11,512,210	)
Share Transactions:
Proceeds from sale of shares		269,581,113			364,164,267
Net asset value of shares issued to shareholders in payment of distributions declared		3,451,377			7,989,422
Cost of shares redeemed		(124,652,801	)		(466,819,321	)
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS		148,379,689			(94,665,632	)
Change in net assets		144,453,777			(97,458,120	)
Net Assets:
Beginning of period		540,782,907			638,241,027
End of period (including undistributed (distributions in excess of) net investment income of $1,081 and $(337), respectively)	$	685,236,684		$	540,782,907

See Notes which are an integral part of the Financial Statements

Notes to Financial Statements

August 31, 2004 (unaudited)

1. ORGANIZATION

Federated U.S. Government Securities Fund: 1-3 Years (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 offers three classes of shares: Institutional Shares, Institutional Service Shares and Class Y Shares. The investment objective of the Fund is to provide current income.

2. SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles (GAAP) in the United States of America.

Investment Valuation

U.S. government securities are generally valued at the mean of the latest bid and asked price as furnished by an independent pricing service. Short-term securities are valued at the prices provided by an independent pricing service. However, short-term securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, which approximates fair market value. Investments in other open-end, regulated investment companies are valued at net asset value. Securities for which no quotations are readily available are valued at fair value as determined in accordance with procedures established by and under general supervision of the Board of Trustees (the "Trustees").

Repurchase Agreements

It is the policy of the Fund to require the custodian bank to take possession, to have legally segregated in the Federal Reserve Book Entry System, or to have segregated within the custodian bank's vault, all securities held as collateral under repurchase agreement transactions. Additionally, procedures have been established by the Fund to monitor, on a daily basis, the market value of each repurchase agreement's collateral to ensure that the value of the collateral at least equals the repurchase price to be paid under the repurchase agreement.

The Fund will only enter into repurchase agreements with banks and other recognized financial institutions, such as broker/dealers, which are deemed by the Fund's adviser to be creditworthy pursuant to the guidelines and/or standards reviewed or established by the Trustees. Risks may arise from the potential inability of counterparties to honor the terms of the repurchase agreement. Accordingly, the Fund could receive less than the repurchase price on the sale of collateral securities. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into one or more repurchase agreements.

Investment Income, Gains and Losses, Expenses and Distributions

Interest income and expenses are accrued daily. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value. Investment income, realized and unrealized gains and losses, and certain fund-level expenses are allocated to each class based on relative average daily net assets, except that each class bears certain expenses unique to that class such as distribution and service fees. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.

Premium and Discount Amortization

All premiums and discount on fixed-income securities are amortized/accreted.

Federal Taxes

It is the Fund's policy to comply with the Subchapter M provision of the Internal Revenue Code (the "Code") and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal income tax is necessary.

When-Issued and Delayed Delivery Transactions

The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.

Securities Lending

The Fund participates in a securities lending program providing for the lending of corporate bonds, equity and government securities to qualified brokers. Collateral for securities loaned is in invested in cash or invested in short-term securities, including repurchase agreements. Collateral is maintained at a minimum level of 102% of the market value of investments loaned, plus interest, if applicable. Earnings on collateral are allocated between the securities lending agent, as a fee for its services under the program, and the Fund, according to agreed-upon rates.

As of August 31, 2004, securities subject to this type of arrangement and related collateral were as follows:

Market Value of Securities Loaned	Market Value of Collateral
$120,792,748	$123,999,000

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.

Other

Investment transactions are accounted for on a trade date basis. Realized gains and losses from investment transactions are recorded on an identified cost basis.

3. SHARES OF BENEFICIAL INTEREST

The following table summarizes share activity:

	Six Months Ended 8/31/2004					Year Ended 2/29/2004
Institutional Shares:	Shares			Amount		Shares			Amount
Shares sold	23,162,317		$	247,395,936		14,359,133		$	154,941,511
Shares issued to shareholders in payment of distributions declared	162,652			1,737,904		411,363			4,434,700
Shares redeemed	(9,490,592	)		(101,586,236	)	(23,846,624	)		(257,233,960	)
NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS	13,834,377		$	147,547,604		(9,076,128	)	$	(97,857,749	)
	Six Months Ended 8/31/2004					Year Ended 2/29/2004
Institutional Service Shares:	Shares			Amount		Shares			Amount
Shares sold	476,479		$	5,093,581		6,718,584		$	72,407,255
Shares issued to shareholders in payment of distributions declared	31,852			340,328		91,306			981,585
Shares redeemed	(1,105,373	)		(11,809,704	)	(9,424,140	)		(101,587,043	)
NET CHANGE RESULTING FROM INSTITUTIONAL SERVICE SHARE TRANSACTIONS	(597,042	)	$	(6,375,795	)	(2,614,520	)	$	(28,198,203	)
	Six Months Ended 8/31/2004					Year Ended 2/29/2004
Class Y Shares:	Shares			Amount		Shares			Amount
Shares sold	1,598,839		$	17,091,596		12,663,559		$	136,815,501
Shares issued to shareholders in payment of distributions declared	128,524			1,373,145		238,825			2,573,137
Shares redeemed	(1,054,246	)		(11,256,861	)	(10,016,274	)		(107,998,318	)
NET CHANGE RESULTING FROM CLASS Y SHARE TRANSACTIONS	673,117		$	7,207,880		2,886,110		$	31,390,320
NET CHANGE RESULTING FROM SHARE TRANSACTIONS	13,910,452		$	148,379,689		(8,804,538	)	$	(94,665,632	)

4. FEDERAL TAX INFORMATION

At August 31, 2004, the cost of investments for federal tax purposes was $823,644,707. The net unrealized appreciation of investments for federal tax purposes was $1,945,243. This consists of net unrealized appreciation from investments for those securities having an excess of value over cost of $2,014,746 and net unrealized depreciation from investments for those securities having an excess of cost over value of $69,503.

At February 29, 2004, the Fund had a capital loss carryforward of $1,790,620 which will reduce the Fund's taxable income arising from future net realized gain on investments, if any, to the extent permitted by the Code, and thus will reduce the amount of distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal tax. Pursuant to the Code, such capital loss carryforward will expire in 2009.

5. INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Adviser Fee

Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to 0.40% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.

Administrative Fee

Federated Administrative Services (FAS), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FAS is based on the average aggregate daily net assets of all Federated funds as specified below:

Maximum Administrative Fee	Average Aggregate Daily Net Assets of the Federated Funds
0.150%	on the first $5 billion
0.125%	on the next $5 billion
0.100%	on the next $10 billion
0.075%	on assets in excess of $20 billion

The administrative fee received during any fiscal year shall be at least $150,000 per portfolio and $40,000 per each additional class of Shares.

FAS may voluntarily choose to waive any portion of its fee. FAS can modify or terminate this voluntary waiver at any time at its sole discretion.

Distribution Services Fee

The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. (FSC), the principal distributor, from the daily net assets of the Fund's Institutional Service Shares to finance activities intended to result in the sale of these shares. The Plan provides that the Fund may incur distribution expenses up to 0.25% of average daily net assets, annually, to compensate FSC. FSC may voluntarily choose to waive any portion of its fee. FSC can modify or terminate this voluntary waiver at any time at its sole discretion.

Shareholder Services Fee

Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company (FSSC), the Fund will pay FSSC up to 0.25% of the average daily net assets of the Fund's Institutional Shares and Institutional Service Shares for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.

Transfer and Dividend Disbursing Agent Fees and Expenses

Prior to July 1, 2004, Federated Services Company, through its subsidiary FSSC, served as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC was based on the size, type and number of accounts and transactions made by shareholders. The fee paid to FSSC during the reporting period was $57,527, after voluntary waiver, if applicable.

General

Certain of the Officers and Trustees of the Fund are Officers and Directors or Trustees of the above companies.

6. LEGAL PROCEEDINGS

Beginning in October 2003, Federated Investors, Inc. and various subsidiaries thereof (including the advisers and distributor for various investment companies, collectively, "Federated"), along with various investment companies sponsored by Federated ("Funds") were named as defendants in several class action lawsuits now pending in the United States District Court for the District of Maryland seeking damages of unspecified amounts. The lawsuits were purportedly filed on behalf of people who purchased, owned and/or redeemed shares of Federated-sponsored mutual funds during specified periods beginning November 1, 1998. The suits are generally similar in alleging that Federated engaged in illegal and improper trading practices including market timing and late trading in concert with certain institutional traders, which allegedly caused financial injury to the mutual fund shareholders. Federated and various Funds have also been named as defendants in several additional lawsuits, the majority of which are now pending in the United States District Court for the Western District of Pennsylvania, alleging, among other things, excessive advisory and Rule 12b-1 fees, and seeking damages of unspecified amounts. The Board of the Funds has retained the law firm of Dickstein Shapiro Morin & Oshinsky LLP to represent the Funds in these lawsuits. Federated and the Funds, and their respective counsel, are reviewing the allegations and will respond appropriately. Additional lawsuits based upon similar allegations may be filed in the future. The potential impact of these recent lawsuits and future potential similar suits is uncertain. Although we do not believe that these lawsuits will have a material adverse effect on the Funds, there can be no assurance that these suits, the ongoing adverse publicity and/or other developments resulting from the related regulatory investigations will not result in increased Fund redemptions, reduced sales of Fund shares, or other adverse consequences for the Funds.

Mutual funds are not bank deposits or obligations, are not guaranteed by any bank, and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other government agency. Investment in mutual funds involves investment risk, including the possible loss of principal.

This report is authorized for distribution to prospective investors only when preceded or accompanied by the Fund's prospectus, which contains facts concerning its objective and policies, management fees, expenses, and other information.

VOTING PROXIES ON FUND PORTFOLIO SECURITIES

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to securities held in the Fund's portfolio is available, without charge and upon request, by calling 1-800-341-7400. A report on "Form N-PX" of how the Fund voted any such proxies during the most recent 12-month period ended June 30 is available through Federated's Internet site. Go to http://www.federatedinvestors.com, select "Products," select the "Prospectuses and Regulatory Reports" link, then select the Fund to access the link to Form N-PX. This information is also available from the EDGAR database on the SEC's Internet site at http://www.sec.gov.

QUARTERLY PORTFOLIO SCHEDULE

The Fund files with the SEC a complete schedule of its portfolio holdings, as of the close of the first and third quarters of its fiscal year, on "Form N-Q." These filings are available on the SEC's website at http://www.sec.gov; and may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. (Call 1-800-SEC-0330 for information on the operation of the Public Reference Room.) You may also access this information from the "Products" section of the Federated Investors website at www.federatedinvestors.com by clicking on "Portfolio Holdings" and selecting the name of the Fund, or by selecting the name of the Fund and clicking on "Portfolio Holdings." You must register on the website the first time you wish to access this information.

IMPORTANT NOTICE ABOUT FUND DOCUMENT DELIVERY

In an effort to reduce costs and avoid duplicate mailings, the Fund(s) intend to deliver a single copy of certain documents to each household in which more than one shareholder of the Fund(s) resides (so-called "householding"), as permitted by applicable rules. The Fund's "householding" program covers its/their Prospectus and Statement of Additional Information, and supplements to each, as well as Semi-Annual and Annual Shareholder Reports and any Proxies or information statements. Shareholders must give their written consent to participate in the "householding" program. The Fund is also permitted to treat a shareholder as having given consent ("implied consent") if (i) shareholders with the same last name, or believed to be members of the same family, reside at the same street address or receive mail at the same post office box, (ii) the Fund gives notice of its intent to "household" at least sixty (60) days before it begins "householding" and (iii) none of the shareholders in the household have notified the Fund(s) or their agent of the desire to "opt out" of "householding." Shareholders who have granted written consent, or have been deemed to have granted implied consent, can revoke that consent and opt out of "householding" at any time: shareholders who purchased shares through an intermediary should contact their representative; other shareholders may call the Fund at 1-800-341-7400.

Federated
World-Class Investment Manager

Federated U.S. Government Securities Fund: 1-3 Years
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
www.federatedinvestors.com
Contact us at 1-800-341-7400 or
www.federatedinvestors.com/contact

Federated Securities Corp., Distributor

Cusip 31428M100
Cusip 31428M209
Cusip 31428M308

G01436-01 (10/04)

Federated is a registered mark of Federated Investors, Inc. 2004 (c)Federated Investors, Inc.

Item 2.     Code of Ethics

            Not Applicable

Item 3.     Audit Committee Financial Expert

            Not Applicable

Item 4.     Principal Accountant Fees and Services

            Not Applicable

Item 5.     Audit Committee of Listed Registrants

            Not Applicable

Item 6.     Schedule of Investments

            Not Applicable

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

            Not Applicable

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

            Not Applicable

Item 9.     Purchases of Equity Securities by Closed-End Management Investment
            Company and Affiliated Purchasers

            Not Applicable

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

            Not Applicable

Item 11.    Controls and Procedures

(a)  The   registrant's   President  and  Treasurer   have  concluded  that  the
     registrant's  disclosure  controls  and  procedures  (as  defined  in  rule
     30a-3(c)  under the Act) are  effective  in design  and  operation  and are
     sufficient to form the basis of the certifications required by Rule 30a-(2)
     under the Act, based on their evaluation of these  disclosure  controls and
     procedures within 90 days of the filing date of this report on Form N-CSR.

(b)  There were no changes in the  registrant's  internal control over financial
     reporting  (as  defined  in rule  30a-3(d)  under the Act)  during the last
     fiscal half year (the  registrant's  second fiscal half year in the case of
     an annual report) that have materially  affected,  or are reasonably likely
     to materially  affect,  the  registrant's  internal  control over financial
     reporting.

Item 12.    Exhibits


SIGNATURES

Pursuant to the  requirements  of the  Securities  Exchange  Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

Registrant  Federated U.S. Government Securities Fund: 1-3 Years

By          /S/ Richard J. Thomas, Principal Financial Officer
           (insert name and title)

Date        October 25, 2004


Pursuant to the  requirements  of the  Securities  Exchange  Act of 1934 and the
Investment  Company  Act of  1940,  this  report  has been  signed  below by the
following  persons on behalf of the  registrant and in the capacities and on the
dates indicated.


By          /S/ J. Christopher Donahue, Principal Executive Officer
Date        October 25, 2004


By          /S/Richard J. Thomas, Principal Financial Officer
Date        October 25, 2004

EX-99.CERT

N-CSR Item 12(a)(2) - Exhibits: Certifications


I, J. Christopher Donahue, certify that:

1.   I have  reviewed  this report on Form N-CSR of  Federated  U.S.  Government
     Securities Fund: 1-3 Years ("registrant");

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of  operations,  changes in net
     assets, and cash flows (if the financial statements are required to include
     a statement  of cash flows) of the  registrant  as of, and for, the periods
     presented in this report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in  rule  30a-3(c)  under  the  Investment  Company  Act of  1940)  for the
     registrant and have:

     a.   designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;

     b.   NA

     c.   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures,  as of a date
          within 90 days prior to the filing date of this  report  based on such
          evaluation; and

     d.   disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal half-year (the registrant's second fiscal half-year
          in the case of an annual report) that has materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and

5.   The  registrant's  other  certifying  officers and I have  disclosed to the
     registrant's  auditors and the audit committee of the registrant's board of
     directors (or persons performing the equivalent functions):

     a.   all significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize, and report financial information; and

     b.   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.




Date: October 25, 2004
/S/ J. Christopher Donahue
President - Principal Executive Officer








N-CSR Item 12(a)(2) - Exhibits: Certifications



I, Richard J. Thomas, certify that:

1.   I have  reviewed  this report on Form N-CSR of  Federated  U.S.  Government
     Securities Fund: 1-3 Years ("registrant");

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of  operations,  changes in net
     assets, and cash flows (if the financial statements are required to include
     a statement  of cash flows) of the  registrant  as of, and for, the periods
     presented in this report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in  rule  30a-3(c)  under  the  Investment  Company  Act of  1940)  for the
     registrant and have:

     a.   designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;

     b.   NA

     c.   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures,  as of a date
          within 90 days prior to the filing date of this  report  based on such
          evaluation; and

     d.   disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal half-year (the registrant's second fiscal half-year
          in the case of an annual report) that has materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and

5.   The  registrant's  other  certifying  officers and I have  disclosed to the
     registrant's  auditors and the audit committee of the registrant's board of
     directors (or persons performing the equivalent functions):

     a.   all significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize, and report financial information; and

     b.   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.




Date: October 25, 2004
/S/ Richard J. Thomas
Treasurer - Principal Financial Officer

EX-99.906CERT

N-CSR Item 12(b) - Exhibits: Certifications

                          SECTION 906 CERTIFICATION

Pursuant to 18  U.S.C.ss.  1350,  the  undersigned  officers of  Federated  U.S.
Government Securities Fund: 1-3 Years (the "Registrant"), hereby certify, to the
best of our knowledge, that the Registrant's Report on Form N-CSR for the period
ended August 31, 2004 (the  "Report")  fully complies with the  requirements  of
Section 13(a) or 15(d),  as  applicable,  of the  Securities and Exchange Act of
1934 and that the information  contained in the Report fairly  presents,  in all
material  respects,  the  financial  condition  and results of operations of the
Registrant.


Dated:  October 25, 2004

/s/ J. Christopher Donahue

Title: President, Principal Executive Officer



Dated:  October 25, 2004

/s/ Richard J. Thomas

Title: Treasurer, Principal Financial Officer

This certification is being furnished solely pursuant to 18 U.S.C.ss. 1350 and
is not being filed as part of the Report or as a separate disclosure document.