N-CSRS

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-05336

Prudential Institutional Liquidity Portfolio, Inc.

Exact name of registrant as specified in charter:

Gateway Center 3,

100 Mulberry Street,

Newark, New Jersey 07102

Address of principal executive offices:

Deborah A. Docs

Gateway Center 3,

100 Mulberry Street,

Newark, New Jersey 07102

Name and address of agent for service:

Registrant’s telephone number, including area code: 800-225-1852

Date of fiscal year end: 3/31/2009

Date of reporting period: 9/30/2008

Item 1 – Reports to Stockholders

SEMIANNUAL REPORT

SEPTEMBER 30, 2008

PRUDENTIAL

INSTITUTIONAL LIQUIDITY PORTFOLIO, INC./

INSTITUTIONAL MONEY MARKET SERIES

FUND TYPE

Money market

OBJECTIVE

High current income consistent with the

preservation of principal and liquidity

This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus.

The views expressed in this report and information about the Series’ portfolio holdings are for the period covered by this report and are subject to change thereafter.

The accompanying financial statements as of September 30, 2008, were not audited and, accordingly, no auditor’s opinion is expressed on them.

Prudential Financial and the Rock logo are registered service marks of The Prudential Insurance Company of America, Newark, NJ, and its affiliates.

Your Series’ Performance

Series objective

The investment objective of the Prudential Institutional Liquidity Portfolio, Inc. (PILP)/Institutional Money Market Series is high current income consistent with the preservation of principal and liquidity. There can be no assurance that the Series will achieve its investment objective.

Yields will fluctuate from time to time, and past performance does not guarantee future results. Current performance may be lower or higher than the past performance data quoted. The investment return and principal value will fluctuate, and shares, when sold, may be worth more or less than the original cost. For the most recent month-end performance update, visit our websites at www.prudential.com and www.jennisondryden.com. Gross operating expenses: Class A, 0.37%; Class I, 0.25%. Net operating expenses apply to: Class A, 0.20%; Class I, 0.15%, after contractual reduction through 7/31/2009.

Series Facts as of 9/30/08
	7-Day Current Yield†		Net Asset Value (NAV)		Weighted Avg. Maturity (WAM)	Net Assets (Millions)
PILP Class A*	2.42	%	$	1.00	32 Days	$	738.7
PILP Class I**	2.47	%	$	1.00	32 Days	$	516.2
iMoneyNet, Inc. Prime Institutional Universe Average***	2.31	%		N/A	43 Days		N/A

^† The 7-Day Current Yields for Class A and Class I are net of expense reimbursements, management and distribution fee waivers. Without such expense reimbursements, management and distribution fee waivers, the yields would have been lower.

* Class A shares are subject to distribution and service (12b-1) fees.

** Class I shares are not subject to distribution and service (12b-1) fees.

*** iMoneyNet, Inc. reports a 7-day current yield and WAM on Tuesdays. This is the data of all funds in the iMoneyNet, Inc. Prime Institutional Universe Average category as of September 30, 2008, the closest date before the end of the Series’ current reporting period.

An investment in the Series is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Series seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in the Series.

Not withstanding the preceding statements, the Series is participating in the U.S. Department of the Treasury’s Temporary Guarantee Program for Money Market Funds (the Program). The Program generally does not guarantee any new investments in the Series made after September 19, 2008, and is scheduled to expire on December 18, 2008. For more information about the scope and limitations of the Program, please see the Series’ prospectus as supplemented on October 28, 2008.

Prudential Institutional Liquidity Portfolio, Inc./Institutional Money Market Series 1

Your Series’ Performance (continued)

Institutional Money Market Fund Yield Comparison

Weighted Average Maturity Comparison

Yields will fluctuate from time to time, and past performance does not guarantee future results. Yields would have been lower without expense reimbursements, management and distribution fee waivers. Current performance may be lower or higher than the past performance data quoted. The investment return will fluctuate, and although the Series seeks to preserve the net asset value at $1 per share, principal value may fluctuate, and shares, when sold, may be worth more or less than the original cost. For the most recent month-end performance update, visit our websites at www.prudential.com and www.jennisondryden.com.

2 Visit our websites at www.prudential.com and www.jennisondryden.com

Past performance does not guarantee future results. The graphs portray weekly 7-day current yields and weekly WAMs, respectively, for the PILP/Institutional Money Market Series and the iMoneyNet, Inc. Prime Institutional Universe Average every Tuesday from March 25, 2008 to September 30, 2008, the closest dates before the beginning and end of the Series’ current reporting period. The data portrayed for the Series at the end of the reporting period in the graphs may not match the data portrayed in the Series Facts table as of September 30, 2008.

An investment in the Series is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Series seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in the Series.

Not withstanding the preceding statements, the Series is participating in the U.S. Department of the Treasury’s Temporary Guarantee Program for Money Market Funds (the Program). The Program generally does not guarantee any new investments in the Series made after September 19, 2008, and is scheduled to expire on December 18, 2008. For more information about the scope and limitations of the Program, please see the Series’ prospectus as supplemented on October 28, 2008.

Prudential Institutional Liquidity Portfolio, Inc./Institutional Money Market Series 3

Fees and Expenses (Unaudited)

As a shareholder of a fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemptions, as applicable, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Series expenses, as applicable. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Series 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 on April 1, 2008, at the beginning of the period, and held through the six-month period ended September 30, 2008. The example is for illustrative purposes only; you should consult the Prospectus for information on initial and subsequent minimum investment requirements.

The Series’ transfer agent may charge additional fees to holders of certain accounts that are not included in the expenses shown in the table on the following page. These fees apply to individual retirement accounts (IRAs) and Section 403(b) accounts. As of the close of the six-month period covered by the table, IRA fees included an annual maintenance fee of $15 per account (subject to a maximum annual maintenance fee of $25 for all accounts held by the same shareholder). Section 403(b) accounts are charged an annual $25 fiduciary maintenance fee. Some of the fees may vary in amount, or may be waived, based on your total account balance or the number of JennisonDryden funds, including the Series, that you own. You should consider the additional fees that were charged to your Series account over the six-month period when you estimate the total ongoing expenses paid over the period and the impact of these fees on your ending account value, as these additional expenses are not reflected in the information provided in the expense table. Additional fees have the effect of reducing investment returns.

Actual Expenses

The first line for each share class in the table on the following page provides information about actual account values and actual expenses. You may use the information on 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 ÷ $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Six-Month Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line for each share class in the table on the following page provides information about hypothetical account values and hypothetical expenses based on

4 Visit our websites at www.prudential.com and www.jennisondryden.com

the Series’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Series’ 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 costs of investing in the Series 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). Therefore, the second line for each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Prudential Institutional Liquidity Portfolio, Inc./ Institutional Money Market Series		Beginning Account Value April 1, 2008		Ending Account Value September 30, 2008		Annualized Expense Ratio Based on the Six-Month Period*		Expenses Paid During the Six- Month Period**
Class A	Actual	$	1,000.00	$	1,012.80	0.20	%	$	1.01
	Hypothetical	$	1,000.00	$	1,024.07	0.20	%	$	1.01
Class I	Actual	$	1,000.00	$	1,013.10	0.15	%	$	0.76
	Hypothetical	$	1,000.00	$	1,024.32	0.15	%	$	0.76

* Net of expense reimbursements, management and distribution fee waivers.

** Series expenses (net of fee waivers or subsidies, if any) for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 183 days in the six-month period ended September 30, 2008, and divided by the 365 days in the Series’ fiscal year ending March 31, 2009 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Series may invest.

Prudential Institutional Liquidity Portfolio, Inc./Institutional Money Market Series 5

Portfolio of Investments

as of September 30, 2008 (Unaudited)

Principal Amount (000)		Description	Value (Note 1)
	CERTIFICATES OF DEPOSIT    14.4%
$	40,000	Banco Bilbao Vizcaya Argentaria SA 2.795%, 12/4/08	$	40,000,292
	25,000	BNP Paribas Bank 2.760%, 11/12/08		25,000,000
	18,000	Branch Banking & Trust Co. 2.710%, 11/17/08		18,000,000
	50,000	Rabobank Nederland NV (New York Branch) 2.720%, 11/24/08		50,000,000
	8,000	SanPaolo IMI S.p.A. 2.800%, 10/7/08		7,999,994
	40,000	Skandinaviska Enskilda Banken AB 2.800%, 11/17/08		40,000,000
				181,000,286
	COMMERCIAL PAPER    36.7%
	30,000	Australia & New Zealand Banking Group Ltd., 144A 3.210%, 10/2/09(b)		30,000,000
	9,000	Bank of America Corp. 2.760%, 12/12/08(b)		8,950,230
	24,000	Bank of Ireland 3.315%, 9/4/09(b)		24,000,000
	30,000	Citigroup Funding, Inc. 2.870%, 11/24/08(b)		29,870,850
	40,000	2.910%, 12/9/08(b)		39,776,900
	50,000	Danske Corp., 144A 2.720%, 11/21/08(b)		49,807,333
	15,000	DnB NOR Bank ASA, 144A 2.710%, 11/10/08(b)		14,954,833
	15,000	Edison Asset Securitization LLC, 144A 5.000%, 10/28/08(b)		14,943,750
	25,000	General Electric Capital Corp. 2.630%, 12/17/08(b)		24,859,368
	42,000	JPMorgan Chase & Co. 2.750%, 12/10/08(b)		41,775,417
	20,000	2.760%, 12/9/08(b)		19,894,200
	22,000	Long Lane Master Trust IV, 144A 5.600%, 10/1/08(b)		22,000,000
	46,013	Old Line Funding LLC, 144A 6.000%, 10/1/08(b)		46,013,000
	20,000	PNC Funding Corp. 2.660%, 10/22/08(b)		19,968,967

See Notes to Financial Statements.

Prudential Institutional Liquidity Portfolio, Inc./Institutional Money Market Series 7

Portfolio of Investments

as of September 30, 2008 (Unaudited) continued

Principal Amount (000)		Description	Value (Note 1)
	COMMERCIAL PAPER (Continued)
$	17,000	Prudential PLC, 144A 2.780%, 10/21/08(b)	$	16,973,744
	2,000	2.800%, 10/24/08(b)		1,996,448
	9,000	Reckitt Benckiser Group PLC, 144A 2.710%, 10/14/08(b)		8,991,193
	21,200	SanPaolo IMI U.S. Financial Corp. 2.800%, 11/5/08(b)		21,142,289
	25,000	Skandinaviska Enskilda Banken AB, 144A 2.800%, 11/25/08(b)		24,893,056
				460,811,578
	LOAN PARTICIPATION    1.6%
	20,000	Caterpillar, Inc. 4.000%, 10/7/08 (cost $20,000,000)		20,000,000
	OTHER CORPORATE OBLIGATIONS    16.3%
	32,000	Bank of America NA 2.998%, 8/6/09(a)		32,000,000
	34,000	General Electric Capital Corp., MTN 3.429%, 10/24/08(a)		33,998,955
	13,000	MetLife Insurance Co. of Connecticut 3.060%, 2/25/09(a)(d)(e) (original cost $13,000,000; date purchase 2/22/08)		13,000,000
	9,000	3.239%, 7/7/09(a)(d)(e) (original cost $9,000,000; date purchase 7/6/07)		9,000,000
	46,000	Morgan Stanley Dean Witter, MTN 2.636%, 10/31/08(a)		46,000,000
	50,000	Nordea Bank AB, MTN, 144A 3.149%, 9/24/09(a)		49,999,999
	20,000	Wells Fargo & Co., MTN 3.380%, 9/23/09(a)		20,012,301
				204,011,255
	REPURCHASE AGREEMENT    5.5%
	69,642	Banc of America, Inc. 0.50%, dated 9/30/08, due 10/1/08 in the amount of $69,642,967 (cost $69,642,000; the value of the collateral including accrued interest was $71,036,011)(g)		69,642,000
	U. S. GOVERNMENT AGENCY OBLIGATIONS    13.8%
	25,000	Federal Home Loan Bank(a) 1.710%, 2/19/09		25,000,000

See Notes to Financial Statements.

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Principal Amount (000)		Description	Value (Note 1)
	U. S. GOVERNMENT AGENCY OBLIGATIONS (Continued)
$	54,000	1.785%, 2/27/09	$	54,000,000
	20,000	1.820%, 3/27/09		20,000,000
	10,000	2.397%, 2/17/09		10,000,000
	44,000	Federal Home Loan Mortgage Corp. 2.170%, 11/17/08		43,858,112
	20,000	2.403%, 10/6/08(h)		19,993,472
				172,851,584
Shares
	AFFILIATED MONEY MARKET MUTUAL FUND    11.6%
	145,637,750	Dryden Core Investment Fund - Taxable Money Market Series (cost $145,637,750; Note 3)(c)		145,637,750
		Total Investments    99.9% (amortized cost $1,253,954,453)(f)		1,253,954,453
		Other assets in excess of liabilities    0.1%		920,117
		Net Assets    100.0%	$	1,254,874,570

The following annotations have been used in the Portfolio:

144A—Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers. Unless otherwise noted, 144A securities are deemed to be liquid.

MTN—Medium Term Note

(a) Floating Rate Security. The interest rate shown reflects the rate in effect at September 30, 2008.

(b) Rate quoted represents yield-to-maturity as of purchase date.

(c) Prudential Investments LLC, the manager of the Series, also serves as manager of the Dryden Core Investment Fund—Taxable Money Market Series.

(d) Indicates a security that has been deemed illiquid.

(e) Private placement restricted as to resale and does not have a readily available market. The aggregate original cost of such securities is $22,000,000. The aggregate value of $22,000,000 is 1.8% of net assets.

(f) The cost of securities for federal income tax purposes is substantially the same as for financial reporting purposes.

(g) Repurchase agreements are collateralized by United States Treasury or federal agency obligations.

(h) Represents a zero coupon bond. Rate shown reflects the effective yield at the time of purchase.

Various inputs are used in determining the value of the Series’ investments. These inputs are summarized in the three broad levels listed below.

Level 1—quoted prices in active markets for identical securities

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

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

See Notes to Financial Statements.

Prudential Institutional Liquidity Portfolio, Inc./Institutional Money Market Series 9

Portfolio of Investments

as of September 30, 2008 (Unaudited) continued

The following is a summary of the inputs used as of September 30, 2008 in valuing the Series’ assets carried at fair value:

Valuation inputs	Investments in Securities		Other Financial Instruments*
Level 1—Quoted Prices	$	145,637,750	—
Level 2—Other Significant Observable Inputs		1,108,316,703	—
Level 3—Significant Unobservable Inputs		—	—
Total	$	1,253,954,453	—

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

As of March 31, 2008 and September 30, 2008, the Series did not use any significant unobservable inputs (Level 3) in determining the value of investments.

The industry classification of portfolio holdings and other assets in excess of liabilities shown as a percentage of net assets as of September 30, 2008 were as follows:

Commercial Banks	32.1	%
Financial Services	18.2
U.S. Government Agency	13.8
Affiliated Money Market Mutual Fund	11.6
Security Brokers & Dealers	9.2
Asset Backed Securities	8.6
Life Insurance	4.8
Machinery	1.6
	99.9
Other assets in excess of liabilities	0.1
	100.0	%

See Notes to Financial Statements.

10 Visit our websites at www.prudential.com and www.jennisondryden.com

Statement of Assets and Liabilities

as of September 30, 2008 (Unaudited)

Assets
Investments, at amortized cost which approximates market value:
Unaffiliated investments	$	1,108,316,703
Affiliated investments		145,637,750
Dividends and interest receivable		1,794,865
Prepaid expenses		25,015
Total assets		1,255,774,333
Liabilities
Dividends payable		588,124
Management fee payable		115,229
Accrued expenses		97,780
Affiliated transfer agent fee payable		46,220
Distribution fee payable		34,708
Deferred directors’ fees		15,119
Payable to custodian		2,583
Total liabilities		899,763
Net Assets	$	1,254,874,570
Net assets were comprised of:
Common stock, at par	$	1,254,875
Paid-in capital in excess of par		1,253,619,695
Net assets, September 30, 2008	$	1,254,874,570
Class A
Net asset value, offering price and redemption price per share ($738,715,671 ÷ 738,715,671 shares of $.001 par value common stock issued and outstanding)	$	1.00
Class I
Net asset value, offering price and redemption price per share ($516,158,899 ÷ 516,158,899 shares of $.001 par value common stock issued and outstanding)	$	1.00

Prudential Institutional Liquidity Portfolio, Inc./Institutional Money Market Series 11

Statement of Operations

Six Months Ended September 30, 2008 (Unaudited)

Net Investment Income
Income
Unaffiliated interest income	$	19,454,339
Affiliated dividend income		2,024,001
Total income		21,478,340
Expenses
Management fee		1,566,665
Distribution fee—Class A		542,380
Transfer agent’s fees and expenses (including affiliated expense of $141,200) (Note 3)		151,000
Custodian’s fees and expenses		100,000
Registration fees		63,000
Directors’ fees		27,000
Legal fees and expenses		20,000
Reports to shareholders		17,000
Insurance expenses		14,000
Audit fee		10,000
Miscellaneous expenses		12,750
Total expenses		2,523,795
Less: Expense Subsidy (Note 4)		(404,947	)
Management fee waiver (Note 2)		(391,666	)
Distribution fee waiver (Note 2)		(316,388	)
Net expenses		1,410,794
Net investment income		20,067,546
Realized Gain On Investments
Net realized gain on investment transactions		50,986
Net Increase In Net Assets Resulting From Operations	$	20,118,532

See Notes to Financial Statements.

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Statement of Changes in Net Assets

(Unaudited)

	Six Months Ended September 30, 2008			Year Ended March 31, 2008
Decrease In Net Assets
Operations
Net investment income	$	20,067,546		$	99,244,416
Net realized gain on investment transactions		50,986			43,803
Net increase in net assets resulting from operations		20,118,532			99,288,219
Dividends and distributions (Note 1)
Class A		(11,506,765	)		(50,486,438	)
Class I		(8,611,767	)		(48,801,781	)
		(20,118,532	)		(99,288,219	)
Series share transactions (Net of conversions) (Note 6)
Net proceeds from shares sold		2,665,090,268			10,070,574,811
Net asset value of shares issued in reinvestment of dividends and distributions		18,678,766			89,558,497
Cost of shares reacquired		(3,188,629,462	)		(10,414,813,896	)
Net decrease in net assets from Series share transactions		(504,860,428	)		(254,680,588	)
Total decrease		(504,860,428	)		(254,680,588	)
Net Assets
Beginning of period		1,759,734,998			2,014,415,586
End of period	$	1,254,874,570		$	1,759,734,998

See Notes to Financial Statements.

Prudential Institutional Liquidity Portfolio, Inc./Institutional Money Market Series 13

Notes to Financial Statements

continued

Prudential Institutional Liquidity Portfolio, Inc. (the “Fund”) is registered under the Investment Company Act of 1940 as an open-end, management investment company. The Fund was organized as a corporation under the laws of Maryland on September 1, 1987. The Fund consists of two series—the Institutional Money Market Series (the “Series”) and the Liquid Assets Series. The Liquid Assets Series has not yet commenced operations. The investment objective of the Series is high current income consistent with the preservation of principal and liquidity. The Series invests primarily in money market instruments maturing in 13 months or less whose ratings are within the 2 highest ratings categories by a nationally recognized statistical rating organization or, if not rated, are of comparable quality. The ability of the issuers of the securities held by the Series to meet their obligations may be affected by economic developments in a specific industry or region.

Note 1. Accounting Policies

The following is a summary of significant accounting policies followed by the Fund and the Series in the preparation of its financial statements.

Securities Valuation: Portfolio securities of the Series are valued at amortized cost, which approximates market value. The amortized cost method involves valuing a security at its cost on the date of purchase and thereafter assuming a constant amortization to maturity of any discount or premium. If the amortized cost method is determined not to represent fair value, the fair value shall be determined by or under the direction of the Board of Directors. When determining the fair value of securities some of the factors influencing the valuation include, the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or other reports or information deemed reliable by the investment adviser regarding the issuer or the markets or industry in which it operates.

Investments in mutual funds are valued at their net asset value as of the close of the New York Stock Exchange on the date of valuation.

The Series may hold up to 10% of its net assets in illiquid securities, including those that are restricted as to disposition under securities law (“restricted securities”). Restricted securities, sometimes referred to as private placements, are valued pursuant to the valuation procedures noted above.

14 Visit our websites at www.prudential.com and www.jennisondryden.com

Repurchase Agreements: In connection with transactions in repurchase agreements with U.S. financial institutions, it is the Series’ policy that its custodian or designated sub custodians, as the case may be under triparty repurchase agreements, take possession of the underlying collateral securities, the value of which exceeds the principal amount of the repurchase transaction, including accrued interest. To the extent that any repurchase agreement exceeds one business day, the value of collateral is marked-to-market on a daily basis to ensure adequacy of the collateral. If the seller defaults and the value of the collateral declines or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Series may be delayed or limited.

Loan Participations: The Series may invest in loan participations. When The Series purchases a loan participation, the Series typically enters into a contractual relationship with the lender or third party selling such participations, (“Selling Participant”), but not the borrower. As a result, the Series assumes the credit risk of the borrower, the Selling Participant and any other persons interpositioned between the Series and the borrower. The Series may not directly benefit from the collateral supporting the senior loan in which it has purchased the loan participant.

Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized gains or losses on sales of securities are calculated on the identified cost basis. Interest income, including amortization of premium and accretion of discount on debt securities, as required, is recorded on the accrual basis. Dividend income is recorded on ex-dividend date. Expenses are recorded on the accrual basis.

Net investment income or loss (other than distribution fees, which are charged directly to the respective classes) and realized gains or losses are allocated daily to each class of shares based upon the relative proportion of net assets of each class at the beginning of the day.

Federal Income Taxes: For federal income tax purposes, each series in the Fund is treated as a separate taxpaying entity. It is the Series’ policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net investment income and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required.

Dividends and Distributions: The Series declares daily dividends from net investment income and net realized short-term capital gains or losses. Payment of dividends is made monthly. Dividends and distributions are determined in accordance with federal income tax regulations, which may differ from U.S. generally accepted accounting principles.

Prudential Institutional Liquidity Portfolio, Inc./Institutional Money Market Series 15

Notes to Financial Statements

continued

Estimates: The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

Note 2. Agreements

The Fund has a management agreement with Prudential Investments LLC (“PI”). Pursuant to this agreement, PI has responsibility for all investment advisory services and supervises the subadvisor’s performance of such services. PI has entered into a subadvisory agreement with Prudential Investment Management, Inc. (“PIM”). The subadvisory agreement provides that PIM will furnish investment advisory services in connection with the management of the Series. In connection therewith, PIM is obligated to keep certain books and records of the Series. PI continues to have responsibility for all investment advisory services pursuant to the management agreement and supervises PIM’s performance of such services. PI pays for the services of PIM, the cost of compensation of officers of the Series, occupancy and certain clerical and bookkeeping costs of the Series. The Series bears all other costs and expenses.

The management fee paid to PI is accrued daily and payable monthly, at an annual rate of .20 of 1% of the Series’ average daily net assets. PI has contractually agreed to waive a portion (.05 of 1% of the Series’ average daily net assets) of its management fee, which amounted to $391,666 ($.0003 per share) for the six months ended September 30, 2008. The Series is not required to reimburse PI for such waiver.

The Series has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”), which acts as the distributor of the Series’ Class A and Class I shares. The Series compensates PIMS for distributing and servicing the Series’ Class A shares, pursuant to the plan of distribution at an annual rate of .12 of 1% of the Series’ average daily net assets of the Class A shares. PIMS has contractually agreed to waive a portion (.07 of 1% of the Series’ average daily net assets of the Class A shares) of the distribution fee, which amounted to $316,388 ($.0004 per Class A share) for the six months ended September 30, 2008. The Series is not required to reimburse PIMS for such waiver. The Class A distribution fee is accrued daily and payable monthly. No distribution or service fees are paid to PIMS as distributor of the Class I shares of the Series.

PI, PIM and PIMS are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).

16 Visit our websites at www.prudential.com and www.jennisondryden.com

Note 3. Other Transactions with Affiliates

Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PI and an indirect, wholly-owned subsidiary of Prudential, serves as the Series’ transfer agent. Transfer agent’s fees and expenses in the Statement of Operations include certain out-of-pocket expenses paid to nonaffiliates, where applicable.

The Series pays networking fees to affiliated and unaffiliated broker/dealers, including fees related to the services of First Clearing, LLC (“First Clearing”), an affiliate of PI. These networking fees are payments made to broker/dealers that clear mutual fund transactions through a national clearing system. For the six months ended September 30, 2008, the Series incurred approximately $12,100 in total networking fees, of which approximately $11,700 was paid to First Clearing. These amounts are included in transfer agent’s fees and expenses in the Statement of Operations.

The Series invests in the Taxable Money Market Series (the “Portfolio”), a portfolio of the Dryden Core Investment Fund, pursuant to an exemptive order received from the Securities and Exchange Commission. The Portfolio is a money market mutual fund registered under the Investment Company Act of 1940, as amended, and managed by PI.

Note 4. Expense Subsidy

PI has contractually agreed to subsidize operating expenses so that total Series operating expenses do not exceed .20% and .15% of the average daily net assets of the Class A and Class I shares, respectively. For the six months ended September 30, 2008, such reimbursement amounted to $404,947 ($.0003 per share for Class A and I shares; .05 of 1% of the Series’ average daily net assets).

Note 5. Tax Information

Management has analyzed the Series’ tax positions taken on federal income tax returns for all open tax years and has concluded that as of September 30, 2008, no provisions for income tax would be required in the Series’ financial statements. The Series’ federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.

Note 6. Capital

The Series offers Class A and Class I shares. Class A shareholders of the Series who satisfy the minimum purchase requirements to purchase Class I shares will have their Class A shares exchanged for Class I shares on a quarterly basis.

Prudential Institutional Liquidity Portfolio, Inc./Institutional Money Market Series 17

Notes to Financial Statements

continued

There are 10 billion authorized shares of common stock, $.001 par value per share, divided into 5 billion authorized Class A shares and 5 billion authorized Class I shares.

As of September 30, 2008 Prudential owned $25,398,072 Class A shares and $272,038,598 Class I shares.

Class A	Share and Dollar Amounts
Six months ended September 30, 2008:
Shares sold	556,819,469
Shares issued in reinvestment of dividends and distributions	10,212,904
Shares reacquired	(774,130,568	)
Net increase (decrease) in shares outstanding before conversion	(207,098,195	)
Shares reacquired upon conversion into Class I	(53,108,320	)
Net increase (decrease) in shares outstanding	(260,206,515	)
Year ended March 31, 2008:
Shares sold	1,926,745,580
Shares issued in reinvestment of dividends and distributions	44,584,369
Shares reacquired	(1,694,118,679	)
Net increase (decrease) in shares outstanding before conversion	277,211,270
Shares reacquired upon conversion into Class I	(216,549,689	)
Net increase (decrease) in shares outstanding	60,661,581
Class I
Six months ended September 30, 2008:
Shares sold	2,108,270,799
Shares issued in reinvestment of dividends and distributions	8,465,862
Shares reacquired	(2,414,498,894	)
Net increase (decrease) in shares outstanding before conversion	(297,762,233	)
Shares issued upon conversion from Class A	53,108,320
Net increase (decrease) in shares outstanding	(244,653,913	)
Year ended March 31, 2008:
Shares sold	8,143,829,231
Shares issued in reinvestment of dividends and distributions	44,974,128
Shares reacquired	(8,720,695,217	)
Net increase (decrease) in shares outstanding before conversion	(531,891,858	)
Shares issued upon conversion from Class A	216,549,689
Net increase (decrease) in shares outstanding	(315,342,169	)

18 Visit our websites at www.prudential.com and www.jennisondryden.com

Note 7. New Accounting Pronouncement

In March 2008, the Financial Accounting Standards Board (“FASB”) released Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“FAS 161”). FAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk related contingent features in derivative agreements. The application of FAS 161 is required for any reporting period beginning after November 15, 2008. At this time, management is evaluating the implications of FAS 161 and its impact on the financial statements has not yet been determined.

Note 8. Subsequent Event

On October 6, 2008, the Board of Directors approved the participation in the U.S. Department of the Treasury’s Temporary Guarantee Program for Money Market Funds (the “Program”) through December 18, 2008.

The Series is responsible for payment of fees required to participate in the Program without regard to any waivers or expense limitation in effect for the Series. The participation fee for the initial three-month term of the Program is 0.01% of the net asset value of the Series as of September 19, 2008.

As a requirement of participation in the Program, the Series has agreed to liquidate if its net asset value declines to below $0.995 (a “Guarantee Event”) if such Guarantee Event is not cured. The Program’s guarantee only applies to the lesser of the number of shares owned as of the close of business on September 19, 2008 and the number of shares owned when a Guarantee Event occurs.

Prudential Institutional Liquidity Portfolio, Inc./Institutional Money Market Series 19

Financial Highlights

(Unaudited)

	Class A
	Six Months Ended September 30, 2008
Per Share Operating Performance:
Net Asset Value, Beginning Of Period	$	1.00
Net investment income and net realized gains(b)		.013
Dividends and distributions to shareholders		(.013	)
Net asset value, end of period	$	1.00
Total Return(a):		1.28	%
Ratios/Supplemental Data:
Net assets, end of period (000)	$	738,716
Average net assets (000)	$	901,497
Ratios to average net assets(d):
Expenses, including distribution and service (12b-1) fees(b)		.20	%(e)
Expenses, excluding distribution and service (12b-1) fees(c)		.15	%(e)
Net investment income(b)		2.54	%(e)

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported, and includes reinvestment of dividends and distributions. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total return for periods less than one full year are not annualized.

(b) Net of management and distribution fee waiver and expense subsidy (Notes 2 and 4).

(c) Net of management fee waiver and expense subsidy (Notes 2 and 4).

(d) Does not include expenses of the underlying fund in which the Series invests.

(e) Annualized.

See Notes to Financial Statements.

20 Visit our websites at www.prudential.com and www.jennisondryden.com

Class A
Year Ended March 31,
2008			2007			2006			2005			2004
$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
	.048			.051			.036			.016			.010
	(.048	)		(.051	)		(.036	)		(.016	)		(.010	)
$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
	4.97	%		5.22	%		3.63	%		1.55	%		1.04	%
$	998,922		$	938,261		$	472,993		$	268,561		$	331,762
$	1,045,667		$	734,585		$	323,012		$	317,021		$	383,687
	.20	%		.20	%		.20	%		.20	%		.20	%
	.15	%		.15	%		.15	%		.15	%		.15	%
	4.83	%		5.11	%		3.71	%		1.54	%		1.03	%

See Notes to Financial Statements.

Prudential Institutional Liquidity Portfolio, Inc./Institutional Money Market Series 21

Financial Highlights

(Unaudited) continued

	Class I
	Six Months Ended September 30, 2008
Per Share Operating Performance:
Net Asset Value, Beginning Of Period	$	1.00
Net investment income and net realized gains(b)		.013
Dividends and distributions to shareholders		(.013	)
Net asset value, end of period	$	1.00
Total Return(a):		1.31	%
Ratios/Supplemental Data:
Net assets, end of period (000)	$	516,159
Average net assets (000)	$	660,888
Ratios to average net assets(c):
Expenses, including distribution and service (12b-1) fees(b)		.15	%(d)
Expenses, excluding distribution and service (12b-1) fees(b)		.15	%(d)
Net investment income(b)		2.59	%(d)

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported, and includes reinvestment of dividends and distributions. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total return for periods less than one full year are not annualized.

(b) Net of management fee waiver and expense subsidy (Notes 2 and 4).

(c) Does not include expenses of the underlying fund in which the Series invests.

(d) Annualized.

See Notes to Financial Statements.

22 Visit our websites at www.prudential.com and www.jennisondryden.com

Class I
Year Ended March 31,
2008			2007			2006			2005			2004
$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
	.049			.051			.037			.016			.011
	(.049	)		(.051	)		(.037	)		(.016	)		(.011	)
$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
	5.02	%		5.27	%		3.68	%		1.60	%		1.09	%
$	760,813		$	1,076,155		$	978,531		$	1,380,740		$	1,959,985
$	995,820		$	988,027		$	1,127,926		$	1,547,937		$	1,688,851
	.15	%		.15	%		.15	%		.15	%		.15	%
	.15	%		.15	%		.15	%		.15	%		.15	%
	4.90	%		5.13	%		3.60	%		1.53	%		1.07	%

See Notes to Financial Statements.

Prudential Institutional Liquidity Portfolio, Inc./Institutional Money Market Series 23

Approval of Advisory Agreements

The Board of Directors (the “Board”) of Prudential Institutional Liquidity Portfolio, Inc. oversees the management of the Institutional Money Market Series (the “Fund”), and, as required by law, determines annually whether to renew the Fund’s management agreement with Prudential Investments LLC (“PI”) and the Fund’s subadvisory agreement with Prudential Investment Management, Inc. (“PIM”). In considering the renewal of the agreements, the Board, including all of the Independent Directors, met on June 3-5, 2008 and approved the renewal of the agreements through July 31, 2009, after concluding that renewal of the agreements was in the best interests of the Fund and its shareholders.

In advance of the meetings, the Board received materials relating to the agreements, and had the opportunity to ask questions and request further information in connection with their consideration. Among other things, the Board considered comparisons with other mutual funds in relevant Peer Universes and Peer Groups. The mutual funds included in each Peer Universe or Peer Group were objectively determined solely by Lipper Inc., an independent provider of mutual fund data. The comparisons placed the Fund in various quartiles over the one-, three-, five- and ten-year periods ending December 31, 2007, with the first quartile being the best 25% of the mutual funds (for performance, the best performing mutual funds and, for expenses, the lowest cost mutual funds).

In approving the agreements, the Board, including the Independent Directors advised by independent legal counsel, considered the factors they deemed relevant, including the nature, quality and extent of services provided, the performance of the Fund, the profitability of PI and its affiliates, expenses and fees, and the potential for economies of scale that may be shared with the Fund and its shareholders. In their deliberations, the Directors did not identify any single factor which alone was responsible for the Board’s decision to approve the agreements with respect to the Fund. In connection with their deliberations, the Board considered information provided by PI throughout the year at regular Board meetings, presentations from portfolio managers and other information, as well as information furnished at or in advance of the meetings on June 3-5, 2008.

The Directors determined that the overall arrangements between the Fund and PI, which serves as the Fund’s investment manager pursuant to a management agreement, and between PI and PIM, which serves as the Fund’s subadviser pursuant to the terms of a subadvisory agreement with PI, are fair and reasonable in light of the services performed, fees charged and such other matters as the Directors considered relevant in the exercise of their business judgment.

The material factors and conclusions that formed the basis for the Directors’ reaching their determinations to approve the continuance of the agreements are separately discussed below.

Prudential Institutional Liquidity Portfolio, Inc./Institutional Money Market Series

Approval of Advisory Agreements (continued)

Nature, Quality and Extent of Services

The Board received and considered information regarding the nature and extent of services provided to the Fund by PI and PIM. The Board considered the services provided by PI, including but not limited to the oversight of the subadviser for the Fund, as well as the provision of fund recordkeeping, compliance, and other services to the Fund. With respect to PI’s oversight of the subadviser, the Board noted that PI’s Strategic Investment Research Group (“SIRG”), which is a business unit of PI, is responsible for monitoring and reporting to PI’s senior management on the performance and operations of the subadviser. The Board also considered that PI pays the salaries of all of the officers and non-independent Directors of the Fund. The Board also considered the investment subadvisory services provided by PIM, as well as adherence to the Fund’s investment restrictions and compliance with applicable Fund policies and procedures. The Board considered PI’s evaluation of the subadviser, as well as PI’s recommendation, based on its review of the subadviser, to renew the subadvisory agreement.

The Board reviewed the qualifications, backgrounds and responsibilities of PI’s senior management responsible for the oversight of the Fund and PIM, and also reviewed the qualifications, backgrounds and responsibilities of PIM’s portfolio managers who are responsible for the day-to-day management of the Fund’s portfolio. The Board was provided with information pertaining to PI’s and PIM’s organizational structure, senior management, investment operations, and other relevant information pertaining to both PI and PIM. The Board also noted that it received favorable compliance reports from the Fund’s Chief Compliance Officer (“CCO”) as to both PI and PIM. The Board noted that PIM is affiliated with PI.

The Board concluded that it was satisfied with the nature, extent and quality of the investment management services provided by PI and the subadvisory services provided to the Fund by PIM, and that there was a reasonable basis on which to conclude that the Fund benefits from the services provided by PI and PIM under the management and subadvisory agreements.

Performance of Institutional Money Market Series

The Board received and considered information about the Fund’s historical performance. The Board considered that the Fund’s gross performance in relation to its Peer Universe (the Lipper Institutional Money Market Funds Performance Universe) was in the first quartile for all periods. The Board also noted that the Fund outperformed its Peer Universe Average during all periods. The Board concluded that, in light of the Fund’s competitive performance, it would be in the interest of the Fund and its shareholders for the Fund to renew the agreements.

Visit our websites at www.prudential.com and www.jennisondryden.com

Fees and Expenses

The Board considered that the Fund’s actual management fee (which reflects any subsidies, waivers or expense caps) and total expenses both ranked in the Expense Group’s first quartile. The Board considered PI’s recommendation to continue the existing cap on Fund operating expenses of 0.15% (exclusive of 12b-1 fees and certain other fees), as well as to continue the existing management fee waiver of 0.05%, and concluded that, in light of the Fund’s competitive performance and total expenses, this recommendation was not unreasonable. The Board concluded that the management and subadvisory fees are reasonable in light of the services provided.

Costs of Services and Profits Realized by PI

The Board was provided with information on the profitability of PI and its affiliates in serving as the Fund’s investment manager. The Board discussed with PI the methodology utilized in assembling the information regarding profitability and considered its reasonableness. The Board recognized that it is difficult to make comparisons of profitability from fund management contracts because comparative information is not generally publicly available and is affected by numerous factors, including the structure of the particular adviser, the types of funds it manages, its business mix, numerous assumptions regarding allocations and the adviser’s capital structure and cost of capital. The Board did not separately consider the profitability of the subadviser, an affiliate of PI, as its profitability was reflected in the profitability report for PI. Taking these factors into account, the Board concluded that the profitability of PI and its affiliates in relation to the services rendered was not unreasonable.

Economies of Scale

The Board noted that the advisory fee schedule for the Fund does not contain breakpoints that reduce the fee rate on assets above specified levels. The Board received and discussed information concerning whether PI realizes economies of scale as the Fund’s assets grow beyond current levels. In light of the Fund’s current size and expense structure, the Board concluded that the absence of breakpoints in the Fund’s fee schedule is acceptable at this time.

Other Benefits to PI and PIM

The Board considered potential ancillary benefits that might be received by PI and PIM and their affiliates as a result of their relationship with the Fund. The Board concluded that potential benefits to be derived by PI included brokerage commissions received by affiliates of PI, transfer agency fees received by the Fund’s transfer agent (which is affiliated with PI), and benefits to the reputation as well as other intangible benefits resulting from PI’s association with the Fund. The Board concluded that the potential benefits to be derived by PIM included its ability to use soft dollar credits,

Prudential Institutional Liquidity Portfolio, Inc./Institutional Money Market Series

Approval of Advisory Agreements (continued)

brokerage commissions received by affiliates of PIM, as well as the potential benefits consistent with those generally resulting from an increase in assets under management, specifically, potential access to additional research resources and benefits to the reputation. The Board concluded that the benefits derived by PI and PIM were consistent with the types of benefits generally derived by investment managers and subadvisers to mutual funds.

After full consideration of these factors, the Board concluded that the approval of the agreements was in the interest of the Fund and its shareholders.

Visit our websites at www.prudential.com and www.jennisondryden.com

n MAIL	n TELEPHONE	n WEBSITE
Gateway Center Three 100 Mulberry Street Newark, NJ 07102	(800) 521-7466	www.prudential.com www.jennisondryden.com

PROXY VOTING

The Board of Directors of PILP has delegated to the Series’ investment subadviser the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Series. A description of these proxy voting policies and procedures is available without charge, upon request, by calling (800) 225-1852 or by visiting the Securities and Exchange Commission’s website at www.sec.gov. Information regarding how the Series voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Series’ websites and on the Commission’s website.

DIRECTORS

Kevin J. Bannon • Linda W. Bynoe • David E.A. Carson • Robert F. Gunia • Michael S. Hyland •
Robert E. La Blanc • Douglas H. McCorkindale • Stephen P. Munn • Richard A. Redeker •
Judy A. Rice • Robin B. Smith • Stephen G. Stoneburn

OFFICERS

Judy A. Rice, President • Robert F. Gunia, Vice President • Grace C. Torres, Treasurer and Principal Financial and Accounting Officer • Kathryn L. Quirk, Chief Legal Officer •
Deborah A. Docs, Secretary • Timothy J. Knierim, Chief Compliance Officer • Valerie M. Simpson, Deputy Chief Compliance Officer • Theresa C. Thompson, Deputy Chief Compliance Officer • Noreen M. Fierro, Anti-Money Laundering Compliance Officer • Jonathan D. Shain, Assistant Secretary • Claudia DiGiacomo, Assistant Secretary •
John P. Schwartz, Assistant Secretary • Andrew R. French, Assistant Secretary •
M. Sadiq Peshimam, Assistant Treasurer • Peter Parrella, Assistant Treasurer

MANAGER	Prudential Investments LLC	Gateway Center Three 100 Mulberry Street Newark, NJ 07102
INVESTMENT SUBADVISER	Prudential Investment Management, Inc.	Gateway Center Two 100 Mulberry Street Newark, NJ 07102
DISTRIBUTOR	Prudential Investment Management Services LLC	Gateway Center Three 100 Mulberry Street Newark, NJ 07102
CUSTODIAN	The Bank of New York Mellon	One Wall Street New York, NY 10286
TRANSFER AGENT	Prudential Mutual Fund Services LLC	PO Box 9656 Providence, RI 02940
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	KPMG LLP	345 Park Avenue New York, NY 10154
FUND COUNSEL	Sullivan & Cromwell LLP	125 Broad Street New York, NY 10004

An investor should consider the investment objectives, risks, charges, and expenses of the Series carefully before investing. The prospectus for the Series contains this and other information about the Series. An investor may obtain a prospectus by visiting our websites at www.prudential.com and www.jennisondryden.com or by calling (800) 225-1852. The prospectus should be read carefully before investing.

E-DELIVERY

To receive your mutual fund documents on-line, go to www.icsdelivery.com/prudential/funds and enroll. Instead of receiving printed documents by mail, you will receive notification via e-mail when new materials are available. You can cancel your enrollment or change your e-mail address at any time by clicking on the change/cancel enrollment option at the icsdelivery website address.

SHAREHOLDER COMMUNICATIONS WITH DIRECTORS

Shareholders of the Series can communicate directly with the Board of Directors by writing to the Chair of the Board, Prudential Institutional Liquidity Portfolio, Inc./Institutional Money Market Series, Prudential Investments, Attn: Board of Directors, 100 Mulberry Street, Gateway Center Three, Newark, NJ 07102. Shareholders can communicate directly with an individual Director by writing to the same address. Communications are not screened before being delivered to the addressee.

AVAILABILITY OF PORTFOLIO SCHEDULE

The Series files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Series’ Forms N-Q are available on the Commission’s website at www.sec.gov. The Series’ Forms N-Q may also be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation and location of the Public Reference Room may be obtained by calling (202) 551-8090. The Series’ schedule of portfolio holdings is also available on the Series’ websites as of the end of each fiscal quarter.

Mutual Funds:

ARE NOT INSURED BY THE FDIC OR ANY FEDERAL GOVERNMENT AGENCY MAY LOSE VALUE ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE

PILP/Institutional Money Market Series
Share Class	Class A	Class I
NASDAQ	PIMXX	PLPXX
CUSIP	744350109	744350604

MF137E2    IFS-A158211    Ed. 11/2008

Item 2 – Code of Ethics – Not required, as this is not an annual filing.

Item 3 – Audit Committee Financial Expert – Not required, as this is not an annual filing.

Item 4 – Principal Accountant Fees and Services – Not required, as this is not an annual filing.

Item 5 – Audit Committee of Listed Registrants – Not applicable.

Item 6 – Schedule of Investments – The schedule is included as part of the report to shareholders filed under Item 1 of this Form.

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)  It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure.

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

Item 12 – Exhibits

(a) (1) Code of Ethics – Not required, as this is not an annual filing.

(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act – Attached hereto as Exhibit EX-99.CERT.

(3) Any written solicitation to purchase securities under Rule 23c-1. – Not applicable.

(b)  Certifications pursuant to Section 906 of the Sarbanes-Oxley Act – Attached hereto as Exhibit EX-99.906CERT.

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) Prudential Institutional Liquidity Portfolio, Inc.

By (Signature and Title)*	/s/ Deborah A. Docs
	Deborah A. Docs
	Secretary
Date November 24, 2008

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 (Signature and Title)*	/s/ Judy A. Rice
	Judy A. Rice
	President and Principal Executive Officer
Date November 24, 2008
By (Signature and Title)*	/s/ Grace C. Torres
	Grace C. Torres
	Treasurer and Principal Financial Officer
Date November 24, 2008

* Print the name and title of each signing officer under his or her signature.

EX-99.CERT

Item 12

Prudential Institutional Liquidity Portfolio, Inc.

Semi-Annual period ending 09/30/08

File No. 811-05336

CERTIFICATIONS

I, Judy A. Rice, certify that:

1. I have reviewed this report on Form N-CSR of Prudential Institutional Liquidity Portfolio, Inc.;

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 officer(s) 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) and internal control over financial reporting (as defined in Rule 30a-3(d) 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) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

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 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; 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 controls 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: November 24, 2008

/s/ Judy A. Rice

Judy A. Rice

President and Principal Executive Officer

Item 12

Prudential Institutional Liquidity Portfolio, Inc.

Semi-Annual period ending 09/30/08

File No. 811-05336

CERTIFICATIONS

I, Grace C. Torres, certify that:

1. I have reviewed this report on Form N-CSR of Prudential Institutional Liquidity Portfolio, Inc.;

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 officer(s) 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) and internal control over financial reporting (as defined in Rule 30a-3(d) 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) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

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 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; 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 controls 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: November 24, 2008

/s/ Grace C. Torres

Grace C. Torres

Treasurer and Principal Financial Officer

EX-99.906CERT

Certification Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

Name of Issuer: Prudential Institutional Liquidity Portfolio, Inc.

In connection with the Report on Form N-CSR of the above-named issuer that is accompanied by this certification, the undersigned hereby certifies, to his or her knowledge, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer.

Date: November 24, 2008	/s/ Judy A. Rice
	Judy A. Rice
	President and Principal Executive Officer
Date: November 24, 2008	/s/ Grace C. Torres
	Grace C. Torres
	Treasurer and Principal Financial Officer