N-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number: 811-06053

Morgan Stanley Insured Municipal Bond Trust

(Exact name of registrant as specified in charter)

522 Fifth Avenue, New York, New York10036
(Address of principal executive offices)(Zip code)

Randy Takian
522 Fifth Avenue, New York, New York 10036
(Name and address of agent for service)

Registrant’s telephone number, including area code: 212-296-6990

Date of fiscal year end: October 31, 2008

Date of reporting period: July 31, 2008

TABLE OF CONTENTS

	Item 1. Schedule of Investments.
	Item 2. Controls and Procedures.
	Item 3. Exhibits.
SIGNATURES

Item 1. Schedule of Investments.

The Trust’s schedule of investments as of the close of the reporting period prepared pursuant to Rule 12-12 of Regulation S-X is as follows:

Morgan Stanley Insured Municipal Bond Trust
Portfolio of Investments July 31, 2008 (unaudited)

PRINCIPAL
AMOUNT IN			COUPON		MATURITY
THOUSANDS			RATE		DATE	VALUE
		Tax-Exempt Municipal Bonds (143.8%)
		Alaska (5.7%)
$	1,400	Alaska Industrial Development & Export Authority, Snettisham Hydroelectric 1st Ser (AMT) (AMBAC Insd)	5.00	%	01/01/27	$	1,262,464
	2,000	North Slope Borough, Alaska, Ser 2000 B (MBIA Insd)	0.00		06/30/11		1,812,700
							3,075,164
		Arizona (0.5%)
	290	Arizona, Ser 2008 A COPs (FSA Insd)	5.00		09/01/26		291,523
		California (35.5%)
	220	Alvord Unified School District, California, Ser 2007 A (FSA Insd)	5.00		08/01/24		228,422
	4,000	Anaheim Public Financing Authority, Distribution Ser 2007 A (MBIA Insd)	4.50		10/01/37		3,621,199
	550	California Department of Water Resources, Power Supply Ser 2008 H (FSA Insd)	5.00		05/01/22		573,238
	1,000	Eastern Municipal Water District, Water & Sewer Refg Ser 2006 A COPs (MBIA Insd)	5.00		07/01/32		994,430
	2,000	Golden State Tobacco Securitization Corporation, Enhanced Asset Backed Ser 2005 A (FGIC Insd)	5.00		06/01/38		1,802,800
	1,000	Los Angeles Department of Water & Power, California, Water 2004 Ser C (MBIA Insd) (a)	5.00		07/01/25		1,027,508
	1,000	Los Angeles Department of Water & Power, California, Water 2004 Ser C (MBIA Insd)	5.00		07/01/25		1,000,600
	250	Oakland Joint Powers Financing Authority, California, Oakland Administration Buildings, Ser 2008 B (AGC Insd)	5.00		08/01/23		251,173
	1,000	Sacramento County Sanitation District’s Financing Authority, California, Ser 2006 (FGIC Insd)	5.00		12/01/28		1,008,320
	1,000	San Diego Redevelopment Agency, Centre City Ser 2004 A (XLCA Insd)	5.00		09/01/23		1,003,080
	1,000	San Francisco, California City County Ser 2008 R-3 (a)	5.00		06/15/28		1,010,370
	2,205	University of California, Ser 2007 (FSA Insd) (a)	4.25		05/15/31		2,157,916
	1,795	University of California, Ser 2007 (FSA Insd) (a)	4.25		05/15/35		1,719,735
	2,500	University of California, Ser 2007 (FSA Insd) (a)	5.00		02/15/33		2,531,169
	525	Yosemite Community College District, California, Election of 2004, Ser 2008 C (FSA Insd) (b)	0.00		08/01/22		260,458
							19,190,418
		Colorado (3.4%)
	1,000	Arkansas River Power Authority, Colorado, Power Ser 2006 (XLCA Insd)	5.25		10/01/40		861,760
	115	Colorado Health Facilities Authority, Catholic Health Ser 2006 C-7 (FSA Insd)	4.75		09/01/25		113,802
	1,000	Denver Convention Center Hotel Authority, Colorado, Refg Ser 2006 (XLCA Insd)	5.00		12/01/30		856,940
							1,832,502
		Connecticut (0.5%)
	275	Connecticut Health and Educational Facilities, Authority Quinnipiac University Ser 2008 K-1 (MBIA Insd)	5.00		07/01/24		279,070
		District of Columbia (2.2%)
	1,000	District of Columbia Ballpark, Ser 2006 B-1 (FGIC Insd)	5.00		02/01/31		918,990
	245	District of Columbia Water and Sewer Authority, Public Utility Ser 2008 A (AGC Insd)	5.00		10/01/28		247,318
							1,166,308
		Florida (14.0%)
	1,000	Broward County Educational Facilities Authority, Florida, Nova Southeastern University Ser 2006 (AGC Insd)	5.00		04/01/31		972,180
	2,000	Broward County School Board, Florida, Ser 2001 A COPs (FSA Insd)	5.00		07/01/26		1,995,220
	280	Florida State Mid-Bay Bridge Auth, Ser 2008 (AGC Insd)	5.00		10/01/27		275,909
	1,500	Jacksonville, Florida, Excise Tax Ser 2003 C (AMT) (MBIA Insd)	5.25		10/01/19		1,481,445
	2,000	Miami Beach, Florida, Water & Sewer Ser 2000 (AMBAC Insd)	5.75		09/01/25		2,098,699
	1,000	Miami-Dade County, Florida, Ser 2005 A (MBIA Insd)	0.00	(c)	10/01/30		722,140
							7,545,593
		Idaho (0.9%)
	455	Idaho Housing & Finance Association, Federal Highway Trust Fund 2008 Ser A (AGC Insd)	5.25		07/15/25		484,388
		Illinois (12.5%)
	1,500	Chicago Park District, Illinois, Harbor Ser 2003 C (AMBAC Insd)	5.00		01/01/24		1,530,284
	2,000	Chicago, Illinois, O’Hare Int’l Airport Passenger Fee Ser 2001 A (AMT) (AMBAC Insd)	5.375		01/01/32		1,897,880
	295	Chicago Transit Authority, Capital Grant Receipts Ser 2008 (AGC Insud)	5.25		06/01/25		306,697
	210	De Kalb County, Illinois, Community United School District No. 428 (FSA Insd)	5.00		01/01/24		216,514
	1,000	Illinois Finance Authority, Swedish American Hospital Ser 2004 (AMBAC Insd)	5.00		11/15/31		957,480
	1,300	Illinois, Ser 2000 (MBIA Insd)	5.75		12/01/18		1,372,553
	1,180	Kendall, Kane & Will Counties, Illinois, Ser 2008 (FSA Insd)	0.00		02/01/27		447,527
							6,728,935
		Michigan (3.9%)
	285	Ferris State University, Michigan, Ser 2008 (FSA Insd)	4.50		10/01/23		280,674
	1,500	Wayne County, Michigan, Detroit Metropolitan Wayne County Airport Refg Ser 2002 D (AMT) (FGIC Insd)	5.50		12/01/17		1,497,060
	320	Wayne State University, Michigan, Ser 2008 (FSA Insd)	5.00		11/15/29		323,312
							2,101,046
		Minnesota (1.8%)
	1,000	Minneapolis Health Care Systems, Minnesota, Fairview Health 2005 Ser D (AMBAC Insd)	5.00		11/15/30		967,300
		Nevada (2.1%)
	175	Nevada Department of Business & Industry, Las Vegas Monorail 1st Tier Ser 2000 (AMBAC Insd)	5.375		01/01/40		116,100
	1,000	Nevada ST Cap Impt & Cultural (a)	5.00		06/01/26		1,027,310
							1,143,410
		New Hampshire (0.9%)
	495	New Hampshire Health & Education Facilities Authority, University of New Hampshire Ser 2001 (AMBAC Insd)	5.125		07/01/33		495,238
		New Jersey (1.3%)
	705	New Jersey Housing Mortgage Finance Authority, Home Buyer Ser 2000 CC (AMT) (MBIA Insd)	5.875		10/01/31		722,625
		New York (15.3%)
	1,000	Long Island Power Authority, New York, Ser 2004 A (AMBAC Insd)	5.00		09/01/34		985,620
	1,000	Metropolitan Transportation Authority, New York, State Service Contract Refg Ser 2002 A (MBIA Insd)	5.50		01/01/20		1,064,470
	2,000	Metropolitan Transportation Authority, New York, State Service Contract Refg Ser 2002 B (MBIA Insd)	5.50		07/01/20		2,119,959
	1,145	New York City Industrial Development Agency, New York, Queens Baseball Stadium Ser 2006 (AMBAC Insd)	5.00		01/01/31		1,108,956

PRINCIPAL
AMOUNT IN				COUPON	MATURITY
THOUSANDS				RATE	DATE		VALUE
	1,000		New York City Industrial Development Agency, New York, Yankee Stadium Ser 2006 (FGIC Insd)	5.00	03/01/46			941,840
	2,295		New York State Housing Finance Agency, 1996 Ser A Refg (FSA Insd)	6.10	11/01/15			2,030,380
								8,251,225
			North Carolina (1.9%)
	1,000		University of North Carolina, Hospitals at Chapel Hill Ser 1999 (AMBAC Insd)	5.00	02/15/24			1,009,700
			Ohio (5.2%)
	2,500		American Muniicipal Power, Ohio Inc. Prairie State Energy Campus Project, Ser 2008 A (AGC Insd) (a)	5.25	02/15/33			2,520,475
	725		Cleveland, Ohio, Public Power System Ser 2008 B-2 (MBIA Insd) (b)	0.00	11/15/26			272,143
								2,792,618
			Pennsylvania (3.8%)
	2,000		Southeastern Pennsylvania Transportation Authority, Ser A 1999 (FGIC Insd)	5.25	03/01/18			2,043,380
			Puerto Rico (5.8%)
	3,000		Puerto Rico Infrastructure Financing Authority, 2000 Ser A (ETM) (d)	5.50	10/01/32			3,110,370
			South Carolina (3.6%)
	1,000		South Carolina State Public Service Authority, Santee Cooper 2006 Ser A (MBIA Insd)	5.00	01/01/36			988,190
	960		South Carolina State Public Service Authority, Santee Cooper Ser 1997 A (MBIA Insd)	5.00	01/01/29			962,563
								1,950,753
			Texas (13.5%)
	2,000		Austin, Texas, Water & Wastewater Ser 2004 A (AMBAC Insd)	5.00	11/15/27			1,994,940
	2,000		Dallas-Forth Worth International Airport, Texas, Refg & Impr Ser 2001 A (AMT) (FGIC Insd)	5.50	11/01/31			1,894,459
	175		Friendswood Independent School District, Texas, Schoolhouse Ser 2008 (PSF Insd)	5.00	02/15/27			178,187
	385		Harris County Health Facilities Development Corp, TECO Project, Ser 2008 (AGC Insd)	5.25	11/15/23			401,771
	275		Houston, Texas, Community College System Sr-Lien-Student Fee Ser 2008 (FSA Insd)	5.00	04/15/25			281,999
	675		Houston, Texas, Hotel Occupancy Ser 2001 B (FSA Insd) (b)	0.00	09/01/25			269,831
	500		Houston, Texas, Combined Utility First Lien Refg 2004 Ser A (FGIC Insd)	5.25	05/15/23			507,180
	285		Humble Independent School District, Texas, Unlimited Tax School Building Ser 2008 A (AGC Insd)	5.00	02/15/26			290,606
	1,000		Lower Colorado River Authority, Texas, Refg 1997 Ser A (FGIC Insd)	5.00	05/15/25			1,006,650
	1,500		North Texas Tollway Authority, System Rev Refunding Bond Ser 2008 D (AGC Insd) (b)	0.00	01/01/28			481,380
								7,307,003
			Virginia (3.7%)
	2,000		Norfolk, Virginia, Water Ser 1995 (MBIA Insd)	5.875	11/01/20			1,996,680
			Washington (5.9%)
	950		Grant County Public Utility District #2, Washington, Wanapum Hydroelectric 2005 Ser A (FGIC Insd)	5.00	01/01/34			918,128
	2,010		Port of Seattle, Washington, Passenger Facility Ser 1998 A (MBIA Insd) (a)	5.00	12/01/23			2,015,126
	800		Washington, Motor Vehicle Fuel Tax, Ser 2004 F (AMBAC Insd)	0.00	12/01/29			256,696
								3,189,950
			Total Tax-Exempt Municipal Bonds (Cost $78,722,541)					77,675,199
			Short-Term Investments (9.3%) Georgia (1.8%)
	5,000		Atlanta, Georgia, Water & Waste Ser 2002 C (FSA Insd) (Demand 06/01/07) (Cost $5,000,000)	0.75	11/01/41			5,000,000
NUMBER OF SHARES (000)
			Investment Company (e) (10.7%)
	5,807		Morgan Stanley Institutional Liquidity Tax-Exempt Portfolio — Institutional Class (Cost $5,806,980)					5,806,980
			Total Short-Term Investments (Cost $10,806,980)					10,806,980
			Total Investments (Cost $89,529,521)					88,482,179
PRINCIPAL AMOUNT IN THOUSANDS
			Floating Rate Notes Related to Securities Held (-16.4%)
$	(8,880	)	Notes with interest rates ranging from 1.92% to 2.45% at July 31 2008 and contractual maturities of collateral ranging from 07/01/25 to 05/15/35 (f) (Cost $(8,880,000))					(8,880,000	)
			Total Net Investments (Cost $80,649,521) (g) (h)		147.4	%		79,602,179
			Liabilites in Excess of Other Assets		(0.2	)		(101,427	)
			Preferred Shares of Beneficial Interest		(47.2	)		(25,500,000	)
			Net Assets Applicable to Common Shareholders		100.0	%	$	54,000,752

AMT	Alternative Minimum Tax.
COPs	Certificates of Participation.
ETM	Escrowed to Maturity.
(a)	Underlying security related to inverse floater entered into by the Trust.
(b)	Capital appreciation bond.
(c)	Currently a zero coupon security, will convert to 5.00% on April 1, 2014.
(d)	A portion of this security has been physically segregated in connection with open futures contracts in the amount of $94,905.
(e)	The Fund invests in Morgan Stanley Institutional Liquidity Tax-Exempt Portfolio — Institutional Class, an open-end management investment company managed by the Investment Adviser. Investment Advisory fees paid by the Fund are reduced by an amount equal to the advisory and administrative service fees paid by Morgan Stanley Institutional Liquidity Tax-Exempt Portfolio — Institutional Class with respect to assets invested by the Fund in Morgan Stanley Institutional Liquidity Tax-Exempt Portfolio — Institutional Class.

(f)	Floating rate note obligations related to securities held. The interest rates shown reflect the rates in effect at July 31, 2008.
(g)	Securities have been designated as collateral in an amount equal to $26,753,214 in connection with open futures contracts, interest rate swaps contracts, securities purchased on a when-issued basis and inverse floating rate municipal obligations.
(h)	The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes.
Bond Insurance:
AGC	Assured Guaranty Corporation.
AMBAC	AMBAC Assurance Corporation.
FGIC	Financial Guaranty Insurance Company.
FSA	Financial Security Assurance Inc.
MBIA	Municipal Bond Investors Assurance Corporation.
XLCA	XL Capital Assurance Inc.

Futures Contracts Open at July 31, 2008:

						UNREALIZED
NUMBER OF		DESCRIPTION, DELIVERY	UNDERLYING FACE			APPRECIATION
CONTRACTS	LONG/SHORT	MONTH AND YEAR	AMOUNT AT VALUE			(DEPRECIATION)
10	Long	U.S. Treasury Note 10 Year	$	1,060,000		$	(288	)
		September 2008
11	Long	U.S. Treasury Note 10 Year		1,263,109			7,460
		September 2008
98	Long	U.S. Treasury Swap 10 Year		10,789,188			77,396
		September 2008
126	Long	U.S. Treasury Swap 5 Year		13,590,282			38,973
		September 2008
29	Short	U.S. Treasury Note 5 Year		(3,228,742	)		(2,784	)
		September 2008
68	Short	U.S. Treasury Bond 20 Year		(7,854,000	)		(16,096	)
		September 2008
		Net Unrealized Appreciation				$	104,660

Interest Rate Swap Contracts Open at July 31, 2008:

	NOTIONAL							UNREALIZED
	AMOUNT	PAYMENTS		RECEIVED			TERMINATION	APPRECIATION
COUNTERPARTY	(000’S)	MADE BY TRUST		BY TRUST			DATE	(DEPRECIATION)
JPMorgan Chase Bank N.A.	3,740	Floating Rate 0.00%	@	Fixed Rate 5.385%			February 14, 2018	$	15,932
Bank of America N.A.	862	Floating Rate 0.00	@	Fixed Rate 5.580			February 28, 2018		9,585
Bank of America N.A.	1,060	Floating Rate 0.00	@	Fixed Rate 5.070			April 14, 2018		(8,321	)
Bank of America N.A.	1,050	Floating Rate 0.00	@	Fixed Rate 4.982			April 15, 2018		(11,529	)
Merrill Lynch & Co.	1,400	Floating Rate 0.00	@	Fixed Rate 5.000			April 15, 2018		(14,504	)
JPMorgan Chase Bank N.A.	4,770	Fixed Rate 5.831		Floating Rate 0.00		@	February 14, 2023		(39,925	)
Bank of America N.A.	1,083	Fixed Rate 5.990		Floating Rate 0.00		@	February 28, 2023		(13,797	)
Bank of America N.A.	1,360	Fixed Rate 5.470		Floating Rate 0.00		@	April 14, 2023		2,094
Bank of America N.A.	1,285	Fixed Rate 5.380		Floating Rate 0.00		@	April 15, 2023		5,140
Merrill Lynch & Co.	1,805	Fixed Rate 5.395		Floating Rate 0.00		@	April 15, 2023		6,480
					Net Unrealized Depreciation				($48,844	)

@ Floating rate represents USD-3 months LIBOR.

Item 2. Controls and Procedures.

(a) The Trust’s principal executive officer and principal financial officer have concluded that the Trust’s disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Trust in this Form N-Q was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, based upon such officers’ evaluation of these controls and procedures as of a date within 90 days of the filing date of the report.

(b) There were no changes in the Trust’s internal control over financial reporting that occurred during the registrant’s fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Trust’s internal control over financial reporting.

Item 3. Exhibits.

(a) A separate certification for each principal executive officer and principal financial officer of the registrant are attached hereto.

2

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.

Morgan Stanley Insured Municipal Bond Trust

/s/ Randy Takian Randy Takian
Principal Executive Officer
September 18, 2008

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

/s/ Randy Takian Randy Takian
Principal Executive Officer
September 18, 2008

/s/ Francis Smith Francis Smith
Principal Financial Officer
September 18, 2008

3

EX-99.CERT

Exhibit 3 A1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Randy Takian, certify that:

1.	I have reviewed this report on Form N-Q of Morgan Stanley Insured Municipal Bond Trust;
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 schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed;
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) 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)	Omitted;
(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 officer(s) 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: September 18, 2008

/s/ Randy Takian  

Randy Takian 

Principal Executive Officer 

4

Exhibit 3 A2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Francis Smith, certify that:

1.	I have reviewed this report on Form N-Q of Morgan Stanley Insured Municipal Bond Trust;
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 schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed;
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) 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)	Omitted;
(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 quarter 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 officer(s) 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: September 18, 2008

/s/ Francis Smith  

Francis Smith 

Principal Financial Officer 

5