Morgan Stanley Us Government Securities Trust N-CSR Certified annual shareholder report (management investment company)

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			811-03870
Morgan Stanley U.S. Government Securities Trust
(Exact name of registrant as specified in charter)
522 Fifth Avenue, New York, New York					10036
(Address of principal executive offices)					(Zip code)
Ronald E. Robison 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:	December 31, 2007
Date of reporting period:		December 31, 2007

Item 1 - Report to Shareholders

Welcome, Shareholder:

In this report, you'll learn about how your investment in Morgan Stanley U.S. Government Securities Trust performed during the annual period. We will provide an overview of the market conditions, and discuss some of the factors that affected performance during the reporting period. In addition, this report includes the Fund's financial statements and a list of Fund investments.

This material must be preceded or accompanied by a prospectus for the fund being offered.

Market forecasts provided in this report may not necessarily come to pass. There is no assurance that the Fund will achieve its investment objective. The Fund is subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

Fund Report

For the year ended December 31, 2007

Total Return for the 12 Months Ended December 31, 2007
Class A			Class B			Class C			Class D			Lehman Brothers U.S. Government Index1			Lipper General U.S. Government Funds Index2
	5.99	%		6.06	%		5.45	%		6.37	%		8.66	%		6.44	%

The performance of the Fund's four share classes varies because each has different expenses. The Fund's total returns assume the reinvestment of all distributions but do not reflect the deduction of any applicable sales charges. Such costs would lower performance. See Performance Summary for standardized performance and benchmark information.

Because Class B shares incurred lower expenses under the 12b-1 Plan than did Class A shares for the fiscal period ended December 31, 2007, the total operating expense ratio for Class B shares was lower and, as a result, the performance of Class B shares was higher than that of the Class A shares. There can be no assurance that this will continue to occur in the future as the maximum fees payable by Class B shares under the 12b-1 Plan are higher than those payable by Class A shares.

Currently, the Distributor has agreed to waive the 12b-1 fee on Class B shares to the extent it exceeds 0.24% of the average daily net assets of such shares on an annualized basis. The Distributor may discontinue this waiver in the future.

Market Conditions

Worries surrounding the residential housing downturn persisted throughout the 12-month period. Confronted with increasing delinquency rates on subprime loans, high-profile hedge fund collapses and a series of subprime mortgage related credit downgrades, markets responded severely beginning in the second quarter of the year. This impact was exacerbated by an influx of forced sellers looking to liquidate assets to help meet margin calls and capital withdrawals, which resulted in a flight to quality.

As the subprime mortgage crisis worsened, investors grew increasingly concerned about the impact on financial markets, the financial system and the broader economy, and demanded additional compensation for owning riskier investments. As a result, credit spreads widened sharply. The subprime debacle severely impacted many major banks and Wall Street firms, which took write-downs and losses on the subprime mortgage loans and securities in their portfolios. Some sold stakes to sovereign funds in exchange for cash infusions needed to bolster their balance sheets.

The Federal Reserve (the "Fed") took steps to ease the liquidity crisis, reducing the target federal funds rate by a total of 1 percent in three separate moves between September and the end of the year, bringing the rate to 4.25 percent. These reductions, coupled with the flight to quality, caused yields across the yield curve to decline, but more so on the short end. As a result, the shape of the yield curve shifted from relatively flat at the

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beginning of the year to steep by the end of the year. Overall, U.S. Treasury securities outperformed all other areas of the fixed income market.

The mortgage market was hit by the turmoil surrounding residential housing, and especially by its spillover effects on secondary market activity, most notably in the non-agency mortgage area. The result was a further reduction in mortgage market liquidity, as well as a sharp diminishment in the availability of non-conforming mortgage loans to the general public.

Performance Analysis

All share classes of Morgan Stanley U.S. Government Securities Trust underperformed the Lehman Brothers U.S. Government Index and the Lipper General U.S. Government Funds Index for the 12 months ended December 31, 2007, assuming no deduction of applicable sales charges.

Throughout the year, we employed a defensive interest rate strategy by keeping the Fund's duration* shorter than that of the benchmark Lehman Brothers U.S. Government Index. Although this strategy was beneficial early in the period when interest rates were rising, it detracted from performance for the overall reporting year as Fed easing in the latter months caused rates to decline significantly.

In March of this year, the Fund's yield curve positioning was adjusted to underweight longer dated issues and overweight intermediate dated issues. This was particularly additive to performance as the spread between intermediate- and long-dated yields widened and the curve steepened during the summer.

The Fund held a slight overweight to mortgage-backed securities for most of the year, with a focus on high-coupon, slow-prepaying agency issues, and high quality non-agency mortgages issued to high quality borrowers. The poor price performance of these issues resulting from the sub-prime mortgage crisis detracted from relative performance. During the fourth quarter, the agency mortgage-backed position was increased to take advantage of lower prices in the market.

There is no guarantee that any sectors mentioned will continue to perform as discussed herein or that securities in such sectors will be held by the Fund in the future.

* A measure of the sensitivity of a bond's price to changes in interest rates, expressed in years. Each year of duration represents an expected 1 percent change in the price of a bond for every 1 percent change in interest rates. The longer a bond's duration, the greater the effect of interest-rate movements on its price. Typically, funds with shorter durations perform better in rising-interest-rate environments, while funds with longer durations perform better when rates decline.

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PORTFOLIO COMPOSITION**
Mortgage-Backed Securities	35.5	%
U.S. Government Obligations	28.0
Collateralized Mortgage Obligations	19.6
U.S. Government Agencies	8.8
Short-Term Investments	7.0
Foreign Government Obligation	1.1

** Does not include open long/short futures contracts with an underlying face amount of $1,046,936,768 with net unrealized depreciation of $1,446,651. Also does not include open swap contracts with unrealized appreciation of $20,075,044.

Data as of December 31, 2007. Subject to change daily. All percentages for portfolio composition are as a percentage of total investments. These data are provided for informational purposes only and should not be deemed a recommendation to buy or sell the securities mentioned. Morgan Stanley is a full-service securities firm engaged in securities trading and brokerage activities, investment banking, research and analysis, financing and financial advisory services.

Investment Strategy

The Fund normally invests at least 80 percent of its net assets in U.S. Government securities. In making investment decisions, the Fund's "Investment Adviser," Morgan Stanley Investment Advisors Inc., considers economic developments, interest rate trends and other factors. The Fund is not limited as to the maturities of the U.S. Government securities in which it may invest.

For More Information About Portfolio Holdings

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its semiannual and annual reports within 60 days of the end of the fund's second and fourth fiscal quarters. The semiannual reports and the annual reports are filed electronically with the Securities and Exchange Commission (SEC) on Form N-CSRS and Form N-CSR, respectively. Morgan Stanley also delivers the semiannual and annual reports to fund shareholders and makes these reports available on its public web site, www.morganstanley.com. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters on Form N-Q. Morgan Stanley does not deliver the reports for the first and third fiscal quarters to shareholders, nor are the reports posted to the Morgan Stanley public web site. You may, however, obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS filings) by access ing the SEC's web site, http://www.sec.gov. You may also review and copy them at the SEC's public reference room in Washington, DC. Information on the operation of the SEC's public reference room may be obtained by calling the SEC at (800) SEC-0330. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's e-mail address

4

(publicinfo@sec.gov) or by writing the public reference section of the SEC, Washington, DC 20549-0102.

Householding Notice

To reduce printing and mailing costs, the Fund attempts to eliminate duplicate mailings to the same address. The Fund delivers a single copy of certain shareholder documents, including shareholder reports, prospectuses and proxy materials, to investors with the same last name who reside at the same address. Your participation in this program will continue for an unlimited period of time unless you instruct us otherwise. You can request multiple copies of these documents by calling (800) 869-NEWS, 8:00 a.m. to 8:00 p.m., ET. Once our Customer Service Center has received your instructions, we will begin sending individual copies for each account within 30 days.

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Performance Summary

Performance of $10,000 Investment—Class B

6

Average Annual Total Returns—Period Ended December 31, 2007
Symbol	Class A Shares* (since 07/28/97) USGAX		Class B Shares** (since 06/29/84) USGBX		Class C Shares† (since 07/28/97) USGCX		Class D Shares†† (since 07/28/97) USGDX
1 Year	5.99% 1.49	3 4	6.06% 1.06	3 4	5.45% 4.45	3 4	6.37% —	3
5 Years	3.46 2.57	3 4	3.55 3.21	3 4	2.93 2.93	3 4	3.70 —	3
10 Years	5.21 4.76	3 4	5.13 5.13	3 4	4.65 4.65	3 4	5.43 —	3
Since Inception	5.34 4.90	3 4	6.90 6.90	3 4	4.87 4.87	3 4	5.58 —	3

Performance data quoted represents past performance, which is no guarantee of future results and current performance may be lower or higher than the figures shown. For most recent month-end performance figures, please visit www.morganstanley.com/msim or speak with your Financial Advisor. Investment returns and principal value will fluctuate and fund shares, when redeemed, may be worth more or less than their original cost. The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Performance for Class A, Class B, Class C, and Class D shares will vary due to differences in sales charges and expenses.

*  The maximum front-end sales charge for Class A is 4.25%.

**  The maximum contingent deferred sales charge (CDSC) for Class B is 5.0%. The CDSC declines to 0% after six years.

†  The maximum contingent deferred sales charge for Class C is 1.0% for shares redeemed within one year of purchase.

††  Class D has no sales charge.

(1)  The Lehman Brothers U.S. Government Index is a broad-based measure of U.S. government and Treasury securities. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

(2)  The Lipper General U.S. Government Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper General U.S. Government Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index. The Fund is in the Lipper General U.S. Government Funds classification as of the date of this report.

(3)  Figure shown assumes reinvestment of all distributions and does not reflect the deduction of any sales charges.

(4)  Figure shown assumes reinvestment of all distributions and the deduction of the maximum applicable sales charge. See the Fund's current prospectus for complete details on fees and sales charges.

‡  Ending value assuming a complete redemption on December 31, 2007.

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Expense Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption fees; and (2) ongoing costs, including advisory fees; distribution and service (12b-1) 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.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period 07/01/07 – 12/31/07.

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. You may use the information in 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 divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about 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. 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 cost 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 and do not reflect any transactional costs, such as sales charges (loads) and redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs, and will not help you determine the relative total cost of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value		Ending Account Value		Expenses Paid During Period *
	07/01/07		12/31/07		07/01/07 – 12/31/07
Class A
Actual (5.04% return)	$	1,000.00	$	1,050.40	$	4.65
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,020.67	$	4.58
Class B
Actual (5.17% return)	$	1,000.00	$	1,051.70	$	4.45
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,020.87	$	4.38
Class C
Actual (4.86% return)	$	1,000.00	$	1,048.60	$	7.23
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,018.15	$	7.12
Class D
Actual (5.17% return)	$	1,000.00	$	1,051.70	$	3.36
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,021.93	$	3.31

*  Expenses are equal to the Fund's annualized expense ratios of 0.90%, 0.86%, 1.40% and 0.65% for Class A, Class B, Class C and Class D shares, respectively, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

Because Class B shares incurred lower expenses under the 12b-1 Plan than did Class A shares for six months ended December 31, 2007, the total operating expense ratio for Class B shares was lower and, as a result, the performance of Class B shares was higher than that of the Class A shares. There can be no assurance that this will continue to occur in the future as the maximum fees payable by Class B shares under the 12b-1 Plan are higher than those payable by Class A shares.

Currently, the Distributor has agreed to waive the 12b-1 fee on Class B shares to the extent it exceeds 0.24% of the average daily net assets of such shares on an annualized basis. The Distributor may discontinue the waiver in the future.

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Morgan Stanley U.S. Government Securities Trust

Portfolio of Investments  nDecember 31, 2007

PRINCIPAL AMOUNT IN THOUSANDS		DESCRIPTION AND MATURITY DATE	COUPON RATE			VALUE
		U.S. Government Obligations (34.6%)
		U.S. Treasury Bonds
$	37,500	02/15/31		5.375	%	$	42,260,775
	47,500	08/15/27		6.375			58,970,538
	102,500	02/15/27		6.625			130,119,035
	57,500	02/15/25		7.625			78,855,903
	72,965	08/15/20		8.75			103,912,448
	4,750	02/15/15		11.25			6,941,683
		U.S. Treasury Notes
	78,300	*		3.875			79,891,448
	20,000	*		4.25			20,638,060
	48,500	11/15/09		3.50			48,943,339
	126,890	02/15/13		3.875			129,467,517
	35,000	08/15/08		4.125			35,158,620
		Total U.S. Government Obligations (Cost $705,916,104)					735,159,366
		Mortgage-Backed Securities (43.7%)
		Federal Home Loan Mortgage Corp. (3.1%)
	62,700	**		6.50			64,453,656
	355	12/01/18 - 02/01/19		9.50			387,115
	391	10/01/09 - 08/01/20		10.00			447,722
	145	09/01/14 - 05/01/19		10.50			167,361
							65,455,854
		Federal Home Loan Mortgage Corp. (ARM) (0.4%)
	349	07/01/34		5.447			357,354
	723	08/01/34		6.04			736,707
	8,585	03/01/37		5.624			8,709,184
							9,803,245
		Federal Home Loan Mortgage Corp. Gold (0.1%)
	339	07/01/28 - 02/01/33		6.50			351,089
	1,483	10/01/26 - 05/31/33		7.50			1,583,919
	225	11/01/23 - 02/01/31		8.00			241,269
							2,176,277
		Federal National Mortgage Assoc. (20.2%)
	1,800	01/01/08		3.92			1,794,435
	160,400	**		5.00			156,515,353

See Notes to Financial Statements
9

Morgan Stanley U.S. Government Securities Trust

Portfolio of Investments  nDecember 31, 2007 continued

PRINCIPAL AMOUNT IN THOUSANDS		DESCRIPTION AND MATURITY DATE	COUPON RATE			VALUE
$	162,100	**		5.50	%	$	161,922,744
	61,878	05/01/37		5.50			61,817,613
	19,900	**		6.50			20,456,583
	2,673	06/01/29 - 02/01/33		6.50			2,764,411
	13,800	**		7.00			14,356,313
	4,039	10/01/13 - 07/01/34		7.00			4,251,190
	2,505	01/01/22 - 09/01/35		7.50			2,676,121
	1,717	12/01/21 - 02/01/32		8.00			1,837,025
	225	07/01/24 - 06/01/25		8.50			241,970
	25	04/01/15 - 07/01/23		9.00			26,545
	26	03/01/20 - 01/01/21		9.50			28,066
							428,688,369
		Federal National Mortgage Assoc. (ARM) (7.2%)
	1,686	02/01/34		4.476			1,693,895
	5,473	01/01/35		4.92			5,596,520
	4,556	06/01/34		5.259			4,609,500
	3,024	12/01/36		5.458			3,066,457
	26,380	01/01/37		5.464			26,746,543
	294	07/01/34		5.476			297,123
	20,822	05/01/37		5.813			21,292,721
	325	10/01/34		6.123			333,967
	4,570	12/01/32		6.15			4,661,079
	267	09/01/34		6.155			269,533
	500	10/01/34		6.339			504,799
	18,145	12/01/35		6.833			18,688,157
	2,113	03/01/36		6.867			2,144,289
	385	07/01/33		6.872			392,928
	4,796	01/01/36		6.883			4,863,892
	4,719	01/01/36		6.897			4,785,687
	19,135	03/01/36		6.904			19,407,076
	1,341	03/01/36		7.18			1,363,496
	1,342	05/01/36		7.242			1,365,576
	1,500	07/01/36		7.252			1,527,616
	1,907	05/01/36		7.319			1,942,111
	2,591	04/01/36		7.34			2,638,919
	2,053	07/01/36		7.348			2,104,161
	1,123	08/01/36		7.361			1,145,302
	4,094	04/01/36		7.365			4,168,174

See Notes to Financial Statements
10

Morgan Stanley U.S. Government Securities Trust

Portfolio of Investments  nDecember 31, 2007 continued

PRINCIPAL AMOUNT IN THOUSANDS		DESCRIPTION AND MATURITY DATE	COUPON RATE			VALUE
$	15,402	05/01/36		7.367	%	$	15,787,551
	1,062	03/01/36		7.611			1,085,091
							152,482,163
		Government National Mortgage Assoc. I (9.5%)
	15,005	03/15/26 - 09/15/34		6.00			15,408,087
	24,034	03/15/14 - 07/15/31		6.50			24,908,652
	61,500	04/15/17 - 03/15/27		7.00			65,308,018
	46,925	09/15/16 - 08/15/34		7.50			50,034,368
	7,207	06/15/16 - 09/15/31		8.00			7,778,367
	13,011	05/15/16 - 11/15/24		8.50			14,147,182
	9,185	10/15/08 - 02/15/25		9.00			9,915,735
	5,708	10/15-09 - 12/15/20		9.50			6,233,259
	7,263	11/15/09 - 11/15/20		10.00			8,395,831
	32	06/15/10 - 06/15/15		12.50			37,010
							202,166,509
		Government National Mortgage Assoc. II (3.2%)
	13,332	04/20/35		4.00			13,374,385
	25,065	05/20/34		4.75			25,069,606
	14,490	11/20/33 - 04/20/36		5.00			14,491,370
	2,176	08/20/34		5.25			2,194,140
	1,116	08/20/34 - 04/20/36		5.50			1,125,035
	6,988	02/20/32 - 09/20/34		6.00			7,138,831
	226	06/20/32		6.375			270,185
	2,669	01/20/24 - 05/20/29		6.50			2,771,709
	1,558	03/20/26 - 07/20/29		7.00			1,648,851
	38	11/20/29		7.50			40,096
							68,124,208
		Government National Mortgage Assoc. GPM (0.0%)
	376	09/15/13 - 07/15/15		12.25			432,033
		Total Mortgage-Backed Securities (Cost $912,840,000)					929,328,658
		Collaterized Mortgage Obligations (24.2%)
		U.S. Government Agencies (5.0%)
		Fannie Mae
	160,854	2006-59 IP (IO) 07/25/36		2.542	†		5,716,922
	1,462	2002-77 FH 12/18/32		5.396	†		1,472,059
	924	2006-5 2A1 11/25/28		4.98	†		926,190

See Notes to Financial Statements
11

Morgan Stanley U.S. Government Securities Trust

Portfolio of Investments  nDecember 31, 2007 continued

PRINCIPAL AMOUNT IN THOUSANDS		DESCRIPTION AND MATURITY DATE	COUPON RATE			VALUE
$	5,092	2006-118 A1 12/25/36		4.925	†%	$	5,002,846
	2,792	2006-118 A2 12/25/36		4.925	†		2,740,313
	1,429	Whole Loan 2005-W2 A1 05/25/35		5.065	†		1,418,814
	865	Grantor Trust 2004-T5 A11 05/28/35		5.13	†		850,347
	79	Grantor Trust 2004-T5 A13 05/28/35		5.14	†		79,103
	1,385	Whole Loan 2004-W1 1A4 11/25/43		5.50			1,383,082
	1,882	2006-28 1A1 03/25/36		4.975	†		1,872,354
	23,951	2006-28 1P (IO) 03/25/36		1.71	†		643,679
		Freddie Mac
	10,405	3216 MA (PAC) 04/15/27		6.00			10,569,100
	1,299	2778 FV 03/15/34		5.628	†		1,273,380
	1,238	Whole Loan 2005-S001 2A2 09/25/45		5.015	†		1,226,206
		Government National Mortgage Assoc.
	2,684	2002-55 PD (PAC) 09/20/31		6.00			2,713,724
	24,430	2002-23 PE (PAC) 04/16/32		6.50			25,335,950
	5,516	2005-37 IO (IO) 11/16/32		5.50			741,369
	40,393	2006-24 PA (PAC) 10/20/35		5.50			41,162,985
	766	1999-44 FP (PAC) 06/16/27		5.428	†		766,219
							105,894,642
		Private Issues (19.2%)
		American Home Mortgage Assets
	12,660	2006-3 3A2 10/25/46		5.125	†		11,679,097
	11,061	2007-2 A1 03/25/47		4.99	†		10,304,256
	9,559	2007-2 A2A 03/25/47		5.03	†		8,697,687
	16,052	2006-2 2A2 09/25/46		5.095	†	��	14,528,959
		American Home Mortgage Investment Trust
	12,043	2007-1 GA2 05/25/47		5.105	†		11,039,037
	19,279	2006-3 12A1 12/25/46		5.055	†		18,075,409
		Bear Stearns Mortgage Funding Trust
	2,875	2006-AR5 1A1 12/25/36		5.025	†		2,732,549
	2,701	2007-AR2 A2 03/25/37		5.065	†		2,479,392
	10,501	2006-AR2 1A1 09/25/36		5.065	†		9,848,796
	1,921	2007-AR1 1A2 01/25/37		5.075	†		1,761,418
	14,774	2007-AR3 1A1 03/25/37		5.005	†		13,842,355
		Countrywide Alternative Loan Trust
	11,882	2005-81 A2 02/25/37		5.215	†		10,979,267
	2,018	2006-OA2 A3 05/20/46		5.219	†		1,848,079

See Notes to Financial Statements
12

Morgan Stanley U.S. Government Securities Trust

Portfolio of Investments  nDecember 31, 2007 continued

PRINCIPAL AMOUNT IN THOUSANDS		DESCRIPTION AND MATURITY DATE	COUPON RATE			VALUE
$	1,900	2006-OA10 2A2 08/25/46		5.095	†%	$	1,751,335
	20,395	2006-OA12 A2 09/20/46		5.159	†		18,748,980
	10,200	2006-OA22 A1 02/25/47		5.025	†		9,569,613
	13,998	2006-OA22 A2 02/25/47		5.075	†		12,852,787
	17,529	2006-OA8 1A2 07/25/46		5.095	†		15,946,202
	21,041	2007-OA3 1A2 04/25/47		5.045	†		19,320,998
	17,592	2006-OA1 1A1 03/20/46		5.159	†		16,480,694
		Deutsche Alternative Securities Inc Mortgage LLC
	19,145	2007-OA1 A1 02/25/47		5.015	†		18,056,546
		Greenpoint Mortgage Funding Trust
	2,040	2006-OH1 A2 01/25/37		5.095	†		1,907,387
	21,741	2007-AR1 2A1A 03/25/47		5.065	†		20,405,282
		Harborview Mortgage Loan Trust
	11,651	2006-10 2A1B 11/19/36		5.205	†		10,595,521
	4,900	2005-8 1A2A 09/19/35		5.295	†		4,636,342
	21,010	2006-14 2A1B 03/19/38		5.165	†		19,197,381
	2,740	2006-14 2A1A 03/19/38		5.115	†		2,570,461
	1,651	2007-1 2A1B 04/19/38		5.045	†		1,509,997
	2,580	2006-10 2A1A 11/19/36		5.145	†		2,443,127
		Luminent Mortgage Trust
	1,838	2006-4 A1B 05/25/46		5.095	†		1,695,084
	20,328	2006-7 2A2 12/25/36		5.085	†		18,305,835
		Residential Accredit Loans, Inc.
	11,065	2006-QH1 A2 12/25/36		5.095	†		10,056,869
	19,431	2007-Q03 A2 03/25/47		5.065	†		18,899,322
	9,543	2007-QO4 A2 05/25/47		5.125	†		8,730,398
	5,916	2007-QO4 A3 05/25/47		5.165	†		4,845,736
	2,767	2006-QO10 A1 01/25/37		5.025	†		2,705,674
	21,582	2006-QO10 A2 01/25/37		5.065	†		18,963,794
	2,433	2007-QH1 A2 02/25/37		5.055	†		2,212,728
		Structured Asset Mortgage Investments, Inc.
	19,861	2007-AR1 1A2 01/25/37		5.065	†		18,260,939
	2,393	2007-AR1 2A2 01/25/37		5.075	†		2,183,409
	2,398	2007-AR2 1A2 02/25/37		5.055	†		2,185,462
		WAMU Mortgage Pass-through Certificates
	1,943	2007-OA1 A1B 02/25/47		5.065	†		1,766,452
	65,670	2007-OA2 1XPP (IO) 03/25/47		0.80	†		949,857

See Notes to Financial Statements
13

Morgan Stanley U.S. Government Securities Trust

Portfolio of Investments  nDecember 31, 2007 continued

PRINCIPAL AMOUNT IN THOUSANDS		DESCRIPTION AND MATURITY DATE	COUPON RATE			VALUE
$	2,399	2007-OA1 CA1B 12/25/46		5.065	†%	$	2,192,069
							407,762,582
		Total Collateralized Mortgage Obligations (Cost $547,426,355)					513,657,224
		U.S. Government Agencies (10.9%) Federal Home Loan Mortgage Corp.
	10,400	04/15/09		3.00			10,300,878
	80,000	01/15/12		5.75			85,692,560
	7,550	09/15/09		6.625			7,927,258
		Federal National Mortgage Assoc.
	80,000	03/15/12		6.125			86,995,920
	1,350	06/15/10		7.125			1,461,371
	1,550	01/15/10		7.25			1,662,005
		Tennessee Valley Authority
	2,235	05/01/30		7.125			2,917,281
		Housing Urban Development Series 99-A
	18,800	08/01/10		6.06			19,003,397
	15,290	08/01/11		6.16			15,496,320
		Total U.S. Government Agencies					231,456,990
		(Cost $223,002,659)
		Foreign Government Obligation (1.4%)
	29,130	Egypt Government AID Bond 09/15/15 (Cost $28,581,656)		4.45			29,025,015
		Short-Term Investments (8.6%)
		U.S. Government Obligations (a) (0.3%)
		U.S. Treasury Bills‡
	175	01/10/08		2.72			174,881
	5,900	01/10/08		4.845			5,892,854
		Total U.S. Government Obligations (Cost $6,067,735)					6,067,735

See Notes to Financial Statements
14

Morgan Stanley U.S. Government Securities Trust

Portfolio of Investments  nDecember 31, 2007 continued

NUMBER OF SHARES (000)		DESCRIPTION AND MATURITY DATE			VALUE
		Investment Company (b) (8.3%)
	177,250	Morgan Stanley Institutional Liquidity Government Portfolio - Institutional Class # (Cost $177,249,845)			$	177,249,845
		Total Short-Term Investments (Cost $183,317,580)				183,317,580
		Total Investments (Cost $2,601,084,354) (c) (d)	123.4	%		2,621,944,833
		Liabilities in Excess of Other Assets	(23.4	)		(497,355,045	)
		Net Assets	100.0	%	$	2,124,589,788

  ARM  Adjustable Rate Mortgage.

  GPM  Graduated Payment Mortgage.

  IO  Interest Only Security.

  PAC  Planned Amortzation Class.

  *  Securities purchased on a forward commitment basis.

  **  Securities purchased on a forward commitment basis with an approximate principal amount and no definite maturity date; the actual principal amount and maturity date will be determined upon settlement.

  ‡  A portion of this security has been physically segregated in connection with open futures contracts in an amount equal to $5,547,570.

  #  Includes cash in the amount of $16,200,000 designated as collateral in connection with open swap contracts.

  †  Floating rate security, rate shown is the rate in effect at December 31, 2007.

  (a)  Purchased on a discount basis. The interest rates shown have been adjusted to reflect a money market equivalent yield.

  (b)  See Note 4 to the financial statements regarding investments in Morgan Stanley Institutional Liquidity Government Portfolio - Institutional Class.

  (c)  Securities have been designated as collateral in an amount equal to $1,374,154,675 in connection with securities purchased on a forward commitment basis, open futures contracts and swap contracts.

  (d)  The aggregate cost for federal income tax purposes is $2,621,199,014. The aggregate gross unrealized appreciation is $38,608,524 and the aggregate gross unrealized depreciation is $37,862,705 resulting in net unrealized appreciation of $745,819.

See Notes to Financial Statements
15

Morgan Stanley U.S. Government Securities Trust

Portfolio of Investments  nDecember 31, 2007 continued

Futures Contracts Open at December 31, 2007:

NUMBER OF CONTRACTS		LONG/SHORT	DESCRIPTION, DELIVERY MONTH AND YEAR	UNDERLYING FACE AMOUNT AT VALUE			UNREALIZED APPRECIATION (DEPRECIATION)
	1,788	Long	U.S.Treasury Notes 2 Year, March 2008	$	375,927,000		$	503,240
	266	Long	U.S.Treasury Notes 5 Year, March 2008		29,334,812			(46,319	)
	9	Short	90 Day Euro$ June 2010		(2,157,075	)		(15,550	)
	28	Short	90 Day Euro$ March 2010		(6,721,750	)		(54,327	)
	82	Short	90 Day Euro$ December 2009		(19,716,900	)		(192,142	)
	86	Short	90 Day Euro$ September 2009		(20,715,250	)		(216,165	)
	86	Short	90 Day Euro$ June 2009		(20,749,650	)		(229,656	)
	91	Short	90 Day Euro$ March 2009		(21,983,325	)		(245,763	)
	100	Short	90 Day Euro$ December 2008		(24,157,500	)		(256,004	)
	105	Short	90 Day Euro$ September 2008		(25,333,875	)		(237,167	)
	118	Short	90 Day Euro$ June 2008		(28,395,225	)		(214,041	)
	132	Short	90 Day Euro$ March 2008		(31,602,450	)		(128,253	)
	581	Short	U.S.Treasury Notes 10 Year, March 2008		(65,879,956	)		(198,072	)
	3,216	Short	U.S.Treasury Bonds 20 Year, March 2008		(374,262,000	)		83,568
			Net Unrealized Depreciation				$	(1,446,651	)

See Notes to Financial Statements
16

Morgan Stanley U.S. Government Securities Trust

Portfolio of Investments  nDecember 31, 2007 continued

Interest Rate Swap Contracts Open at December 31, 2007:

COUNTERPARTY	NOTIONAL AMOUNT (000'S)		PAYMENTS RECEIVED BY FUND	PAYMENTS MADE BY FUND+	TERMINATION DATE	UNREALIZED APPRECIATION
JPMorgan Chase N.A. New York	$	45,400	Fixed Rate 5.359%	Floating Rate 5.494%	May 23, 2017	$	2,529,189
Citibank N.A. New York		82,500	Fixed Rate 5.338	Floating Rate 5.498	May 24, 2017		4,462,342
Goldman Sachs Co.		83,000	Fixed Rate 5.341	Floating Rate 5.498	May 24, 2017		4,507,647
JPMorgan Chase N.A. New York		64,200	Fixed Rate 5.719	Floating Rate 5.36	July 19, 2017		5,370,266
JPMorgan Chase N.A. New York		74,000	Fixed Rate 5.064	Floating Rate 5.725	September 11, 2017		2,350,980
Citibank N.A. New York		19,000	Fixed Rate 5.227	Floating Rate 5.20	September 27, 2017		854,620
			Total Unrealized Appreciation			$20,075,044

  +  Floating rate represents USD-3 months LIBOR.

See Notes to Financial Statements
17

Morgan Stanley U.S. Government Securities Trust

Financial Statements

Statement of Assets and Liabilities

December 31, 2007

Assets:
Investments in secruities, at value (cost $2,423,834,509)	$	2,444,694,988
Investment in affiliate, at value (cost $177,249,845)		177,249,845
Unrealized appreciation on open swap contracts		20,075,044
Receivable for:
Interest		21,887,403
Periodic interest on open swap contracts		4,254,720
Shares of beneficial interest sold		511,887
Dividends from affiliate		449,868
Principal paydowns		65,162
Prepaid expenses and other assets		188,151
Receivable from Distributor		1,393,427
Total Assets		2,670,770,495
Liabilities:
Payable for:
Investments purchased		517,145,134
Swap contracts collateral due to brokers		16,200,000
Dividends and distributions to shareholders		2,971,353
Shares of beneficial interest redeemed		2,955,613
Periodic interest on open swap contracts		2,199,026
Variation margin		1,983,320
Distribution fee		1,073,929
Investment advisory fee		708,934
Administration fee		144,954
Transfer agent fee		35,653
Accrued expenses and other payables		762,791
Total Liabilities		546,180,707
Net Assets	$	2,124,589,788
Composition of Net Assets:
Paid-in-capital	$	2,196,359,197
Net unrealized appreciation		39,488,872
Dividends in excess of net investment income		(15,998,456	)
Accumulated net realized loss		(95,259,825	)
Net Assets	$	2,124,589,788
Class A Shares:
Net Assets	$	193,830,742
Shares Outstanding (unlimited authorized, $.01 par value)		21,323,621
Net Asset Value Per Share	$	9.09
Maximum Offering Price Per Share, (net asset value plus 4.44% of net asset value)	$	9.49
Class B Shares:
Net Assets	$	1,566,484,042
Shares Outstanding (unlimited authorized, $.01 par value)		172,196,576
Net Asset Value Per Share	$	9.10
Class C Shares:
Net Assets	$	47,644,129
Shares Outstanding (unlimited authorized, $.01 par value)		5,196,862
Net Asset Value Per Share	$	9.17
Class D Shares:
Net Assets	$	316,630,875
Shares Outstanding (unlimited authorized, $.01 par value)		34,792,975
Net Asset Value Per Share	$	9.10

See Notes to Financial Statements
18

Morgan Stanley U.S. Government Securities Trust

Financial Statements, continued

Statement of Operations

For the year ended December 31, 2007

Net Investment Income: Income
Interest	$	117,372,206
Dividends from affiliate		1,589,693
Total Income		118,961,899
Expenses
Investment advisory fee		8,948,574
Distribution fee (Class A shares)		1,393,326
Distribution fee (Class B shares)		2,472,243
Distribution fee (Class C shares)		368,933
Transfer agent fees and expenses		2,443,234
Administration fee		1,814,191
Shareholder reports and notices		974,771
Custodian fees		501,771
Professional fees		112,778
Registration fees		67,481
Trustees' fees and expenses		40,823
Other		357,667
Total Expenses		19,495,792
Less: amounts waived/reimbursed		(33,652	)
Less: expense offset		(15,219	)
Net Expenses		19,446,921
Net Investment Income		99,514,978
Net Realized and Unrealized Gain (Loss): Net Realized Gain (Loss) on:
Investments		29,601,512
Futures contracts		(20,469,887	)
Option contracts		(18,046	)
Swap contracts		827,350
Net Realized Gain		9,940,929
Net Change in Unrealized Appreciation/Depreciation on:
Investments		4,640,177
Futures contracts		(6,237,846	)
Swap contracts		20,075,044
Net Change in Unrealized Appreciation/Depreciation		18,477,375
Net Gain		28,418,304
Net Increase	$	127,933,282

See Notes to Financial Statements
19

Morgan Stanley U.S. Government Securities Trust

Financial Statements, continued

Statements of Changes in Net Assets

	FOR THE YEAR ENDED DECEMBER 31, 2007			FOR THE YEAR ENDED DECEMBER 31, 2006
Increase (Decrease) in Net Assets: Operations:
Net investment income	$	99,514,978		$	100,027,944
Net realized gain		9,940,929			114,921
Net change in unrealized appreciation/depreciation		18,477,375			(27,597,146	)
Net Increase		127,933,282			72,545,719
Dividends to Shareholders from Net Investment Income:
Class A shares		(26,520,796	)		(67,154,036	)
Class B shares		(60,454,880	)		(29,532,978	)
Class C shares		(2,018,526	)		(2,204,130	)
Class D shares		(16,998,466	)		(8,739,252	)
Total Dividends		(105,992,668	)		(107,630,396	)
Net decrease from transactions in shares of beneficial interest		(198,787,744	)		(486,559,629	)
Net Decrease		(176,847,130	)		(521,644,306	)
Net Assets:
Beginning of period		2,301,436,918			2,823,081,224
End of Period (Including dividends in excess of net investment income of $15,998,456 and $12,323,389, respectively)	$	2,124,589,788		$	2,301,436,918

See Notes to Financial Statements
20

Morgan Stanley U.S. Government Securities Trust

Notes to Financial Statements  nDecember 31, 2007

1. Organization and Accounting Policies

Morgan Stanley U.S. Government Securities Trust (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's investment objective is high current income consistent with safety of principal. The Fund was organized as a Massachusetts business trust on September 29, 1983 and commenced operations on June 29, 1984. On July 28, 1997, the Fund converted to a multiple class share structure.

The Fund offers Class A shares, Class B shares, Class C shares and Class D shares. The four classes are substantially the same except that most Class A shares are subject to a sales charge imposed at the time of purchase and some Class A shares, and most Class B shares and Class C shares are subject to a contingent deferred sales charge imposed on shares redeemed within eighteen months, six years and one year, respectively. Class D shares are not subject to a sales charge. Additionally, Class A shares, Class B shares and Class C shares incur distribution expenses.

The Fund will assess a 2% redemption fee, on Class A shares, Class B shares, Class C shares and Class D shares, which is paid directly to the Fund, for shares redeemed or exchanged within seven days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Fund and its remaining shareholders from the effects of short-term trading.

The following is a summary of significant accounting policies:

A. Valuation of Investments — (1) certain portfolio securities may be valued by an outside pricing service approved by the Fund's Trustees; (2) portfolio securities for which over-the-counter market quotations are readily available are valued at the mean between the last reported bid and asked price; (3) listed options are valued at the latest sale price on the exchange on which they are listed unless no sales of such options have taken place that day, in which case they are valued at the mean between their latest bid and asked price; (4) futures are valued at the latest price published by the commodities exchange on which they trade; (5) when market quotations are not readily available including circumstances under which Morgan Stanley Investment Advisors Inc. (the "Investment Adviser") determines that the market quotations are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Fund's Trustees; (6) interest rate swaps are marked-to-market daily based upon quotations from market makers; (7) investments in open-end mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (8) short-term debt securities having a maturity date of more than sixty days at time of purchase are valued on a mark-to-market basis until sixty days prior to maturity and thereafter at amortized cost based on their value on the 61st day. Short-term debt securities having a maturity date of sixty days or less at the time of purchase are valued at amortized cost.

21

Morgan Stanley U.S. Government Securities Trust

Notes to Financial Statements  nDecember 31, 2007 continued

B. Accounting for Investments — Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on security transactions are determined by the identified cost method. Discounts are accreted and premiums are amortized over the life of the respective securities and are included in interest income. Interest income is accrued daily.

C. Multiple Class Allocations — Investment income, expenses (other than distribution fees), and realized and unrealized gains and losses are allocated to each class of shares based upon the relative net asset value on the date such items are recognized. Distribution fees are charged directly to the respective class.

D. Futures Contracts — A futures contract is an agreement between two parties to buy and sell financial instruments or contracts based on financial indices at a set price on a future date. Upon entering into such a contract, the Fund is required to pledge to the broker cash, U.S. Government securities or other liquid portfolio securities equal to the minimum initial margin requirements of the applicable futures exchange. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in the value of the contract. Such receipts or payments known as variation margin are recorded by the Fund as unrealized gains and losses. Upon closing of the contract, the Fund realizes a gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.

E. Interest Rate Swaps — Interest rate swaps involve the exchange of commitments to pay and receive interest based on a notional principal amount. Net periodic interest payments to be received and paid are accrued daily and recorded as realized gains or losses in the Statement of Operations. The Fund may pay or receive cash to collaterize interest rate swap contracts. This cash collateral is recorded as an assets/liabilities on the Fund's books. Any cash received may be invested in Morgan Stanley Institutional Liquidity Fund.

F. Options — When the Fund writes a call or put option, an amount equal to the premium received is included in the Fund's Statement of Assets and Liabilities as a liability which is subsequently marked-to-market to reflect the current market value of the option written. If a written option either expires or the Fund enters into a closing purchase transaction, the Fund realizes a gain or loss without regard to any unrealized gain or loss on the underlying security and the liability related to such option is extinguished. If a written call option is exercised, the Fund realizes a gain or loss from the sale of the underlying security and the proceeds from such sale are increased by the premium originally received. If a written put option is exercised, the amount of the premium originally received reduces the cost of the security which the Fund purchases upon exercise of the option.

When the Fund purchases a call or put option, the premium paid is recorded as an investment which and is subsequently marked-to-market to reflect the current market value. If a purchased option expires, the Fund will realize a loss to the extent of the premium paid. If the Fund enters into a closing sale transaction, a gain or loss is realized for the difference between the proceeds from the sale and the

22

Morgan Stanley U.S. Government Securities Trust

Notes to Financial Statements  nDecember 31, 2007 continued

cost of the option. If a put option is exercised, the cost of the security or currency sold upon exercise will be increased by the premium originally paid. If a call option is exercised, the cost of the security purchased upon exercise will be increased by the premium originally paid.

G. Federal Income Tax Policy — It is the Fund's policy to comply with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no provision for federal income taxes is required. The Fund files tax returns with the U.S. Internal Revenue Service and New York. The Fund adopted the provisions of the Financial Accounting Standards Board ("FASB") Interpretation No. 48 ("FIN 48") Accounting for Uncertainty in Income Taxes on June 29, 2007. FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in other expenses in the Statement of Operations. Each of the tax years in the four year period ended December 31, 2007, remains subject to examination by taxing authorities.

H. Dividends and Distributions to Shareholders — Dividends and distributions to shareholders are recorded on the ex-dividend date.

I. Use of Estimates — The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures. Actual results could differ from those estimates.

2. Investment Advisory/Administration Agreements

Pursuant to an Investment Advisory Agreement with the Investment Adviser, the Fund pays an advisory fee, accrued daily and payable monthly, by applying the following annual rates to the Fund's net assets determined at the close of each business day: 0.42% to the portion of the daily net assets not exceeding $1 billion; 0.395% to the portion of the daily net assets exceeding $1 billion but not exceeding $1.5 billion; 0.37% to the portion of the daily net assets exceeding $1.5 billion but not exceeding $2 billion; 0.345% to the portion of the daily net assets exceeding $2 billion but not exceeding $2.5 billion; 0.32% to the portion of the daily net assets exceeding $2.5 billion but not exceeding $5 billion; 0.295% to the portion of the daily net assets exceeding $5 billion but not exceeding $7.5 billion; 0.27% to the portion of the daily net assets exceeding $7.5 billion but not exceeding $10 billion; 0.245% to the portion of the daily net assets exceeding $10 billion but not exceeding $12.5 billion; and 0.22% to the portion of the daily net assets exceeding $12.5 billion.

Pursuant to an Administration Agreement with Morgan Stanley Services Company Inc. (the "Administrator"), an affiliate of the Investment Adviser, the Fund pays an administration fee, accrued daily and payable monthly, by applying the annual rate of 0.08% to the Fund's daily net assets.

23

Morgan Stanley U.S. Government Securities Trust

Notes to Financial Statements  nDecember 31, 2007 continued

Under an agreement between the Administrator and State Street Bank and Trust Company ("State Street"), State Street provides certain administrative services to the Fund. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

3. Plan of Distribution

Shares of the Fund are distributed by Morgan Stanley Distributors Inc. (the "Distributor"), an affiliate of the Investment Adviser and Administrator. The Fund has adopted a Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the Act. The Plan provides that the Fund will pay the Distributor a fee which is accrued daily and paid monthly at the following annual rates: (i) Class A — up to 0.25% of the average daily net assets of Class A shares; (ii) Class B — up to 0.75% (0.65% on amounts over $10 billion) of the lesser of: (a) the average daily aggregate gross sales of the Class B shares since the inception of the Fund (not including reinvestment of dividend or capital gain distributions) less the average daily aggregate net asset value of the Class B shares redeemed since the Fund's inception upon which a contingent deferred sales charge has been imposed or waived; or (b) the average daily net assets of Class B shares; and (iii) Class C — up to 0.75% of the average daily net assets of Class C shares.

In the case of Class B shares, provided that the Plan continues in effect, any cumulative expenses incurred by the Distributor but not yet recovered may be recovered through the payment of future distribution fees from the Fund pursuant to the Plan and contingent deferred sales charges paid by investors upon redemption of Class B shares. Although there is no legal obligation for the Fund to pay expenses incurred in excess of payments made to the Distributor under the Plan and the proceeds of contingent deferred sales charges paid by investors upon redemption of shares, if for any reason the Plan is terminated, the Trustees will consider at that time the manner in which to treat such expenses. The Distributor has advised the Fund that there were no excess expense at December 31, 2007.

Effective February 20, 2007, the Distributor has agreed to waive the 12b-1 fee on Class B shares to the extent it exceeds 0.24% of the average daily net assets of such shares on an annualized basis. The Distributor may discontinue this waiver in the future.

For the year ended December 31, 2007, the distribution fee was accrued for Class B shares at the annual rate of 0.20%.

At December 31, 2007, included in the Statement of Assets and Liabilities, is a receivable from the Fund's Distributor which represents payments due to be reimbursed to the Fund under the Plan. Because the Plan is what is referred to as a "reimbursement plan", the Distributor reimburses to the Fund any 12b-1 fees collected in excess of the actual distribution expenses incurred. This receivable represents this excess amount as of December 31, 2007.

24

Morgan Stanley U.S. Government Securities Trust

Notes to Financial Statements  nDecember 31, 2007 continued

In the case of Class A shares and Class C shares, expenses incurred pursuant to the Plan in any calendar year in excess of 0.25% or 0.75% of the average daily net assets of Class A or Class C, respectively, will not be reimbursed by the Fund through payments in any subsequent year, except that expenses representing a gross sales credit to Morgan Stanley Financial Advisors and other authorized financial representatives at the time of sale may be reimbursed in the subsequent calendar year. For the year ended December 31, 2007, the distribution fee was accrued for Class A shares and Class C shares at the annual rate of 0.24% and 0.75%, respectively.

The Distributor has informed the Fund that for the year ended December 31, 2007, it received contingent deferred sales charges from certain redemptions of the Fund's Class A shares, Class B shares and Class C shares of $2,554, $811,259 and $3,019, respectively and received $126,158 in front-end sales charges from sales of the Fund's Class A shares. The respective shareholders pay such charges which are not an expense of the Fund.

4. Security Transactions and Transactions with Affiliates

The Fund invests in Morgan Stanley Institutional Liquidity Government 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 Government Portfolio — Institutional Class with respect to assets invested by the Fund in Morgan Stanley Institutional Liquidity Government Portfolio — Institutional Class. For the year ended December 31, 2007, advisory fees paid were reduced by $33,652 relating to the Fund's investment in Morgan Stanley Institutional Liquidity Government Portfolio — Institutional Class. Income distributions earned by the Fund are recorded as dividends from affiliate in the Statement of Operations and totaled $1,589,693 for the year ended December 31, 2007. During the year ended Decem ber 31, 2007, cost of purchases and sales of investments in Morgan Stanley Institutional Liquidity Government Portfolio — Institutional Class aggregated $691,751,611 and $514,501,766, respectively.

The costs of purchases and proceeds from sales/prepayments/maturities of portfolio securities, excluding short-term investments, for the year ended December 31, 2007 were $4,452,710,761 and $3,971,359,065, respectively.

Morgan Stanley Trust, an affiliate of the Investment Adviser, Administrator and Distributor, is the Fund's transfer agent.

The Fund has an unfunded noncontributory defined benefit pension plan covering certain independent Trustees of the Fund who will have served as independent Trustees for at least five years at the time of retirement. Benefits under this plan are based on factors which include years of service and compensation. The Trustees voted to close the plan to new participants and eliminate the future

25

Morgan Stanley U.S. Government Securities Trust

Notes to Financial Statements  nDecember 31, 2007 continued

benefits growth due to increases to compensation after July 31, 2003. Aggregate pension costs for the year ended December 31,2007, included in Trustees' fees and expenses in the Statement of Operations amounted to $6,044. At December 31, 2007, the Fund had an accrued pension liability of $57,104 which is included in accrued expenses in the Statement of Assets and Liabilities.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan") which allows each independent Trustee to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Trustees. Each eligible Trustee generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the net asset value of the Fund.

5. Purposes of and Risks Relating to Certain Financial Instruments

To hedge against adverse interest rates, the Fund may purchase and sell interest rate futures contracts ("futures contracts").

Futures contracts involve elements of market risk in excess of the amounts reflected in the Statement of Assets and Liabilities. The Fund bears the risk of an unfavorable change in the value of the underlying securities. Risks may also arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts.

For hedging and investment purposes, the Fund may also engage in transactions in listed and over-the-counter options.

The Fund may enter into interest rate swaps and may purchase or sell interest rate caps, floors and collars. The Fund expects to enter into these transactions primarily to manage interest rate risk, hedge portfolio positions and preserve a return or spread on a particular investment or portion of its portfolio. The Fund may also enter into these transactions to protect against any increase in the price of securities the Fund anticipates purchasing at a later date. Interest rate swap transactions are subject to market risk, risk of default by the other party to the transaction, risk of imperfect correlation and manager risk. Such risks may exceed the related amounts shown in the Statement of Assets and Liabilities.

The Fund may invest in mortgage securities. These are fixed income securities that derive their value from or represent interests in a pool of mortgages or mortgage securities. An unexpectedly high rate of defaults on the mortgages held by a mortgage pool may adversely affect the value of a mortgage-backed security and could result in losses to a Fund. The risk of such defaults is generally higher in the case of mortgage pools that include subprime mortgages. Subprime mortgages refer to loans made to borrowers with weakened credit histories or with a lower capacity to make timely payments on their mortgages.

26

Morgan Stanley U.S. Government Securities Trust

Notes to Financial Statements  nDecember 31, 2007 continued

6. Shares of Beneficial Interest

Transactions in shares of beneficial interest were as follows:

	FOR THE YEAR ENDED DECEMBER 31, 2007						FOR THE YEAR ENDED DECEMBER 31, 2006
	SHARES			AMOUNT			SHARES			AMOUNT
CLASS A SHARES
Sold		4,806,808		$	42,794,541			5,942,631		$	53,144,935
Conversion from Class B		—			—			3,794,576			33,827,430
Conversion to Class B		(130,301,241	)		(1,168,869,531	)		—			—
Reinvestment of dividends		2,090,744			18,762,821			4,756,114			42,481,680
Redeemed		(15,952,254	)		(143,286,955	)		(49,913,683	)		(446,239,035	)
Net decrease — Class A		(139,355,943	)		(1,250,599,124	)		(35,420,362	)		(316,784,990	)
CLASS B SHARES
Sold		3,406,176			30,962,945			3,102,789			27,766,865
Conversion from Class A		130,156,148			1,168,869,531			—			—
Conversion to Class A		—			—			(3,790,324	)		(33,827,430	)
Reinvestment of dividends		4,132,783			37,134,043			1,984,694			17,747,389
Redeemed		(30,929,100	)		(277,627,222	)		(21,965,869	)		(196,606,333	)
Net increase (decrease) — Class B		106,766,007			959,339,297			(20,668,710	)		(184,919,509	)
CLASS C SHARES
Sold		568,227			5,152,902			652,672			5,890,668
Reinvestment of dividends		156,980			1,421,552			170,085			1,532,677
Redeemed		(1,445,101	)		(13,067,462	)		(2,381,168	)		(21,458,712	)
Net decrease — Class C		(719,894	)		(6,493,008	)		(1,558,411	)		(14,035,367	)
CLASS D SHARES
Sold		2,349,177			21,194,816			9,611,797			85,358,596
Shares issued in connection with the acquisition of Morgan Stanley Government Income Trust		34,045,541			306,511,820			—			—
Reinvestment of dividends		1,151,119			10,343,930			750,502			6,715,042
Redeemed		(26,920,417	)		(239,085,475	)		(7,028,344	)		(62,893,401	)
Net increase — Class D		10,625,420			98,965,091			3,333,955			29,180,237
Net decrease in Fund		(22,684,410	)	$	(198,787,744	)		(5,313,528	)	$	(486,559,629	)

7. Expense Offset

The expense offset represents a reduction of the fees and expenses for interest earned on cash balances maintained by the Fund with the transfer agent.

27

Morgan Stanley U.S. Government Securities Trust

Notes to Financial Statements  nDecember 31, 2007 continued

8. Federal Income Tax Status

The amount of dividends and distributions from net investment income and net realized capital gains are determined in accordance with federal income tax regulations which may differ from generally accepted accounting principles. These "book/tax" differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment; temporary differences do not require reclassification. Dividends and distributions which exceed net investment income and net realized capital gains for tax purposes are reported as distributions of paid-in-capital.

The tax character of distributions paid was as follows:

	FOR THE YEAR ENDED DECEMBER 31, 2007		FOR THE YEAR ENDED DECEMBER 31, 2006
Ordinary income	$	105,992,668	$	107,630,396
As of December 31, 2007, the tax-basis components of accumulated losses were as follows:

Undistributed ordinary income	$	983,223
Undistributed long-term gains		—
Net accumulated earnings		983,223
Capital loss carryforward*		(91,624,369	)
Post-October losses		(1,809,230	)
Temporary differences		(139,896	)
Net unrealized appreciation		20,820,863
Total accumulated losses	$	(71,769,409	)

*As of December 31, 2007, the Fund had a net capital loss carryforward of $91,624,369, to offset future capital gains to the extent provided by regulations, which will expire according to the following schedule.

AMOUNT		EXPIRATION
$	883,796	December 31, 2012
	56,167,778	December 31, 2013
	19,174,691	December 31, 2014
	15,398,104	December 31, 2015

As part of the Fund's acquisition of the assets of Morgan Stanley Government Income Trust ("Government Income"), the Fund obtained a net capital loss carryforward of $7,048,694 from Government Income. Utilization of this carryforward is subject to limitations imposed by the Internal Revenue Code and Treasury Regulations, reducing the total carryforward available.

28

Morgan Stanley U.S. Government Securities Trust

Notes to Financial Statements  nDecember 31, 2007 continued

As of December 31, 2007, the Fund had temporary book/tax differences primarily attributable to post-October losses (capital losses incurred after October 31 within the taxable year which are deemed to arise on the first business day of the Fund's next taxable year), mark-to-market of open futures contracts, capital loss deferrals on straddles and book amortization of premiums on debt securities.

Permanent differences, primarily due to losses on paydowns, tax adjustments on swaps and debt securities sold by the Fund and an expired capital loss carryforward, resulted in the following reclassifications among the Fund's components of net assets at December 31, 2007:

DIVIDENDS IN EXCESS OF NET INVESTMENT INCOME		ACCUMULATED NET REALIZED LOSS		PAID-IN-CAPITAL
$	6,192,883	$	395,855	$	(6,588,738	)

9. Accounting Pronouncement

In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, established a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.

10. Fund Acquisition

On March 26, 2007, the Fund acquired all the net assets of Government Income based on the respective valuations as of the close of business on March 23, 2007 pursuant to a Plan of Reorganization approved by the shareholders of Government Income on March 6, 2007. The acquisition was accomplished by a tax-free exchange of 34,045,541 Class D shares of the Fund at a net asset value of $9.00 per share for 31,785,256 shares of Government Income. The net assets of the Fund and Government Income immediately before the acquisition were $2,218,949,999 and $306,511,820 respectively, including unrealized appreciation of $677,937 for Government Income. Immediately after the acquisition, the combined net assets of the Fund amounted to $2,525,461,819.

29

Morgan Stanley U.S. Government Securities Trust

Financial Highlights

Selected ratios and per share data for a share of beneficial interest outstanding throughout each period:

	FOR THE YEAR ENDED DECEMBER 31,
	2007			2006			2005			2004			2003
Class A Shares
Selected Per Share Data:
Net asset value, beginning of period	$	8.98		$	9.09		$	9.15		$	9.21		$	9.41
Income (loss) from investment operations:
Net investment income		0.37			0.33			0.31			0.24			0.26
Net realized and unrealized gain (loss)		0.15			(0.07	)		0.00			0.07			(0.12	)
Total income from investment operations		0.52			0.26			0.31			0.31			0.14
Less dividends from net investment income		(0.41	)		(0.37	)		(0.37	)		(0.37	)		(0.34	)
Net asset value, end of period	$	9.09		$	8.98		$	9.09		$	9.15		$	9.21
Total Return†		5.99	%		3.01	%		3.47	%		3.41	%		1.48	%
Ratios to Average Net Assets(1):
Total expenses (before expense offset)		0.91	%(2)		0.89	%		0.87	%		0.81	%		0.76	%
Net investment income		4.34	%(2)		3.88	%		3.37	%		2.94	%		2.94	%
Supplemental Data:
Net assets, end of period, in thousands	$	193,831		$	1,442,660		$	1,781,950		$	240,835		$	242,335
Portfolio turnover rate		179	%		78	%		182	%		212	%		153	%

  †  Does not reflect the deduction of sales charge. Calculated based on the net asset value as of the last business day of the period.

  (1)  Reflects overall Fund ratios for investment income and non-class specific expenses.

  (2)  Reflects waivers of certain Fund expenses in connection with the investments in Morgan Stanley Institutional Liquidity Government Portfolio - Institutional Class during the period. As a result of such waivers the expenses as a percentage of its net assets had an effect of less than 0.005%.

See Notes to Financial Statements
30

Morgan Stanley U.S. Government Securities Trust

Financial Highlights continued

	FOR THE YEAR ENDED DECEMBER 31,
	2007			2006			2005			2004			2003
Class B Shares
Selected Per Share Data:
Net asset value, beginning of period	$	8.99		$	9.10		$	9.17		$	9.23		$	9.43
Income (loss) from investment operations:
Net investment income		0.37			0.35			0.32			0.25			0.26
Net realized and unrealized gain (loss)		0.16			(0.06	)		(0.01	)		0.07			(0.12	)
Total income from investment operations		0.53			0.29			0.31			0.32			0.14
Less dividends from net investment income		(0.42	)		(0.40	)		(0.38	)		(0.38	)		(0.34	)
Net asset value, end of period	$	9.10		$	8.99		$	9.10		$	9.17		$	9.23
Total Return†		6.06	%		3.28	%		3.46	%		3.52	%		1.49	%
Ratios to Average Net Assets(1):
Total expenses (before expense offset)		0.87	%(2)		0.64	%		0.72	%		0.70	%(3)		0.75	%(3)
Net investment income		4.38	%(2)		4.13	%		3.52	%		3.05	%(3)		2.95	%(3)
Supplemental Data:
Net assets, end of period, in thousands	$	1,566,484		$	588,080		$	783,193		$	2,787,959		$	3,461,241
Portfolio turnover rate		179	%		78	%		182	%		212	%		153	%

  †  Does not reflect the deduction of sales charge. Calculated based on the net asset value as of the last business day of the period.

  (1)  Reflects overall Fund ratios for investment income and non-class specific expenses.

  (2)  Reflects waivers of certain Fund expenses in connection with the investments in Morgan Stanley Institutional Liquidity Government Portfolio - Institutional Class during the period. As a result of such waivers the expenses as a percentage of its net assets had an effect of less than 0.005%.

  (3)  If the Distributor had not rebated a portion of its fees to the Fund, the expense and net investment income ratios would have been as follows:

PERIOD ENDED	EXPENSE RATIO			NET INVESTMENT INCOME RATIO
December 31, 2004		0.93	%		2.82	%
December 31, 2003		1.32			2.38

See Notes to Financial Statements
31

Morgan Stanley U.S. Government Securities Trust

Financial Highlights continued

	FOR THE YEAR ENDED DECEMBER 31,
	2007			2006			2005			2004			2003
Class C Shares
Selected Per Share Data:
Net asset value, beginning of period	$	9.06		$	9.17		$	9.23		$	9.29		$	9.49
Income (loss) from investment operations:
Net investment income		0.32			0.29			0.27			0.20			0.21
Net realized and unrealized gain (loss)		0.16			(0.07	)		0.00			0.06			(0.12	)
Total income from investment operations		0.48			0.22			0.27			0.26			0.09
Less dividends from net investment income		(0.37	)		(0.33	)		(0.33	)		(0.32	)		(0.29	)
Net asset value, end of period	$	9.17		$	9.06		$	9.17		$	9.23		$	9.29
Total Return†		5.45	%		2.62	%		2.87	%		2.86	%		0.93	%
Ratios to Average Net Assets(1):
Total expenses (before expense offset)		1.42	%(2)		1.39	%		1.33	%		1.34	%		1.32	%
Net investment income		3.83	%(2)		3.38	%		2.91	%		2.41	%		2.38	%
Supplemental Data:
Net assets, end of period, in thousands	$	47,644		$	53,582		$	68,513		$	80,342		$	105,392
Portfolio turnover rate		179	%		78	%		182	%		212	%		153	%

  †  Does not reflect the deduction of sales charge. Calculated based on the net asset value as of the last business day of the period.

  (1)  Reflects overall Fund ratios for investment income and non-class specific expenses.

  (2)  Reflects waivers of certain Fund expenses in connection with the investments in Morgan Stanley Institutional Liquidity Government Portfolio - Institutional Class during the period. As a result of such waivers the expenses as a percentage of its net assets had an effect of less than 0.005%.

See Notes to Financial Statements
32

Morgan Stanley U.S. Government Securities Trust

Financial Highlights continued

	FOR THE YEAR ENDED DECEMBER 31,
	2007			2006			2005			2004			2003
Class D Shares
Selected Per Share Data:
Net asset value, beginning of period	$	8.98		$	9.09		$	9.16		$	9.22		$	9.42
Income (loss) from investment operations:
Net investment income		0.39			0.35			0.32			0.26			0.28
Net realized and unrealized gain (loss)		0.16			(0.06	)		0.00			0.07			(0.12	)
Total income from investment operations		0.55			0.29			0.32			0.33			0.16
Less dividends from net investment income		(0.44	)		(0.40	)		(0.39	)		(0.39	)		(0.36	)
Redemption fees		0.01			–			–			–			–
Net asset value, end of period	$	9.10		$	8.98		$	9.09		$	9.16		$	9.22
Total Return†		6.37	%		3.27	%		3.59	%		3.63	%		1.67	%
Ratios to Average Net Assets(1):
Total expenses (before expense offset)		0.67	%(2)		0.64	%		0.62	%		0.59	%		0.57	%
Net investment income		4.58	%(2)		4.13	%		3.62	%		3.16	%		3.13	%
Supplemental Data:
Net assets, end of period, in thousands	$	316,631		$	217,115		$	189,425		$	224,169		$	308,984
Portfolio turnover rate		179	%		78	%		182	%		212	%		153	%

  †  Calculated based on the net asset value as of the last business day of the period.

  (1)  Reflects overall Fund ratios for investment income and non-class specific expenses.

  (2)  Reflects waivers of certain Fund expenses in connection with the investments in Morgan Stanley Institutional Liquidity Government Portfolio - Institutional Class during the period. As a result of such waivers the expenses as a percentage of its net assets had an effect of less than 0.005%.

See Notes to Financial Statements
33

Morgan Stanley U.S. Government Securities Trust

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees of
Morgan Stanley U.S. Government Securities Trust:

We have audited the accompanying statement of assets and liabilities of Morgan Stanley U.S. Government Securities Trust (the "Fund"), including the portfolio of investments, as of December 31, 2007, and the related statements of operations for the year then ended and changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2007, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Morgan Stanley U.S. Government Securities Trust as of December 31, 2007, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP
New York, New York
February 27, 2008

34

Morgan Stanley U.S. Government Securities Trust

Trustee and Officer Information (unaudited)

Independent Trustees:

Name, Age and Address of Independent Trustee	Position(s) Held with Registrant	Term of Office and Length of Time Served*	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Independent Trustee**		Other Directorships Held by Independent Trustee
Frank L. Bowman (63) c/o Kramer Levin Naftalis & Frankel LLP Counsel to the Independent Trustees 1177 Avenue of the Americas New York, NY 10036	Trustee	Since August 2006	President and Chief Executive Officer, Nuclear Energy Institute (policy organization) (since February 2005); Director or Trustee of various Retail Funds and Institutional Funds (since August 2006); Chairperson of the Insurance Sub-Committee of the Insurance, Valuation and Compliance Committee (since February 2007); formerly, variously, Admiral in the U.S. Navy, Director of Naval Nuclear Propulsion Program and Deputy Administrator – Naval Reactors in the National Nuclear Security Administration at the U.S. Department of Energy (1996-2004). Honorary Knight Commander of the Most Excellent Order of the British Empire.		180	Director of the National Energy Foundation, the U.S. Energy Association, the American Council for Capital Formation and the Armed Services YMCA of the USA.
Michael Bozic (67) c/o Kramer Levin Naftalis & Frankel LLP Counsel to the Independent Trustees 1177 Avenue of the Americas New York, NY 10036	Trustee	Since April 1994	Private investor; Chairperson of the Insurance, Valuation and Compliance Committee (since October 2006); Director or Trustee of the Retail Funds (since April 1994) and the Institutional Funds (since July 2003); formerly, Chairperson of the Insurance Committee (July 2006-September 2006); Vice Chairman of Kmart Corporation (December 1998-October 2000), Chairman and Chief Executive Officer of Levitz Furniture Corporation (November 1995-November 1998) and President and Chief Executive Officer of Hills Department Stores (May 1991-July 1995); variously Chairman, Chief Executive Officer, President and Chief Operating Officer (1987-1991) of the Sears Merchandise Group of Sears, Roebuck & Co.		182	Director of various business organizations.

35

Morgan Stanley U.S. Government Securities Trust

Trustee and Officer Information (unaudited) continued

Name, Age and Address of Independent Trustee	Position(s) Held with Registrant	Term of Office and Length of Time Served*	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Independent Trustee**		Other Directorships Held by Independent Trustee
Kathleen A. Dennis (54) c/o Kramer Levin Naftalis & Frankel LLP Counsel to the Independent Trustees 1177 Avenue of the Americas New York, NY 10036	Trustee	Since August 2006	President, Cedarwood Associates (mutual fund and investment management) (since July 2006); Chairperson of the Money Market and Alternatives Sub-Committee of the Investment Committee (since October 2006) and Director or Trustee of various Retail Funds and Institutional Funds (since August 2006); formerly, Senior Managing Director of Victory Capital Management (1993-2006).		180	Director of various non-profit organizations.
Dr. Manuel H. Johnson (59) c/o Johnson Smick Group, Inc. 888 16th Street, N.W. Suite 740 Washington, D.C. 20006	Trustee	Since July 1991	Senior Partner, Johnson Smick International, Inc. (consulting firm); Chairperson of the Investment Committee (since October 2006) and Director or Trustee of the Retail Funds (since July 1991) and the Institutional Funds (since July 2003); Co-Chairman and a founder of the Group of Seven Council (G7C) (international economic commission); formerly, Chairperson of the Audit Committee (July 1991-September 2006); Vice Chairman of the Board of Governors of the Federal Reserve System and Assistant Secretary of the U.S. Treasury.		182	Director of NVR, Inc. (home construction); Director of Evergreen Energy.
Joseph J. Kearns (65) c/o Kearns & Associates LLC PMB754 23852 Pacific Coast Highway Malibu, CA 90265	Trustee	Since August 1994	President, Kearns & Associates LLC (investment consulting); Chairperson of the Audit Committee (since October 2006) and Director or Trustee of the Retail Funds (since July 2003) and the Institutional Funds (since August 1994); formerly, Deputy Chairperson of the Audit Committee (July 2003-September 2006) and Chairperson of the Audit Committee of the Institutional Funds (October 2001-July 2003); CFO of the J. Paul Getty Trust.		183	Director of Electro Rent Corporation (equipment leasing) and The Ford Family Foundation.

36

Morgan Stanley U.S. Government Securities Trust

Trustee and Officer Information (unaudited) continued

Name, Age and Address of
Independent Trustee Position(s)
Held with
Registrant Term of
Office and
Length of
Time Served* Principal Occupation(s) During Past 5 Years Number of
Portfolios
in Fund
Complex
Overseen by
Independent
Trustee** Other Directorships
Held by Independent Trustee

Michael F. Klein (49) c/o Kramer Levin Naftalis & Frankel LLP Counsel to the Independent Trustees 1177 Avenue of the Americas New York, NY 10036	Trustee	Since August 2006	Managing Director, Aetos Capital, LLC (since March 2000) and Co-President, Aetos Alternatives Management, LLC (since January 2004); Chairperson of the Fixed-Income Sub-Committee of the Investment Committee (since October 2006) and Director or Trustee of various Retail Funds and Institutional Funds (since August 2006); formerly, Managing Director, Morgan Stanley & Co. Inc. and Morgan Stanley Dean Witter Investment Management, President, Morgan Stanley Institutional Funds (June 1998-March 2000) and Principal, Morgan Stanley & Co. Inc. and Morgan Stanley Dean Witter Investment Management (August 1997-December 1999).	180	Director of certain investment funds managed or sponsored by Aetos Capital, LLC. Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).
Michael E. Nugent (71) c/o Triumph Capital, L.P. 445 Park Avenue New York, NY 10022	Chairperson of the Board and Trustee	Chairperson of the Boards since July 2006 and Trustee since July 1991	General Partner, Triumph Capital, L.P. (private investment partnership); Chairperson of the Boards of the Retail Funds and Institutional Funds (since July 2006); Director or Trustee of the Retail Funds (since July 1991) and the Institutional Funds (since July 2001); formerly, Chairperson of the Insurance Committee (until July 2006).	182	None.

37

Morgan Stanley U.S. Government Securities Trust

Trustee and Officer Information (unaudited) continued

Name, Age and Address of Independent Trustee	Position(s) Held with Registrant	Term of Office and Length of Time Served*	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Independent Trustee**		Other Directorships Held by Independent Trustee
W. Allen Reed (60) c/o Kramer Levin Naftalis & Frankel LLP Counsel to the Independent Trustees 1177 Avenue of the Americas New York, NY 10036	Trustee	Since August 2006	Chairperson of the Equity Sub-Committee of the Investment Committee (since October 2006) and Director or Trustee of various Retail Funds and Institutional Funds (since August 2006); formerly, President and CEO of General Motors Asset Management; Chairman and Chief Executive Officer of the GM Trust Bank and Corporate Vice President of General Motors Corporation (August 1994-December 2005).		180	Director of Temple-Inland Industries (packaging and forest products); Director of Legg Mason, Inc. and Director of the Auburn University Foundation.
Fergus Reid (75) c/o Lumelite Plastics Corporation 85 Charles Colman Blvd. Pawling, NY 12564	Trustee	Since June 1992	Chairman of Lumelite Plastics Corporation; Chairperson of the Governance Committee and Director or Trustee of the Retail Funds (since July 2003) and the Institutional Funds (since June 1992).		183	Trustee and Director of certain investment companies in the JPMorgan Funds complex managed by J.P. Morgan Investment Management Inc.

38

Morgan Stanley U.S. Government Securities Trust

Trustee and Officer Information (unaudited) continued

Interested Trustees:

Name, Age and Address of Interested Trustee	Position(s) Held with Registrant	Term of Office and Length of Time Served*	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee**		Other Directorships Held by Interested Trustee
James F. Higgins (60) c/o Morgan Stanley Trust Harborside Financial Center Plaza Two Jersey City, NJ 07311	Trustee	Since June 2000	Director or Trustee of the Retail Funds (since June 2000) and the Institutional Funds (since July 2003); Senior Advisor of Morgan Stanley (since August 2000).		181	Director of AXA Financial, Inc. and The Equitable Life Assurance Society of the United States (financial services).

*  This is the earliest date the Trustee began serving the funds advised by Morgan Stanley Investment Advisors Inc. (the "Investment Adviser") (the "Retail Funds") or the funds advised by Morgan Stanley Investment Management Inc. and Morgan Stanley AIP GP LP (the "Institutional Funds").

**  The Fund Complex includes all open-end and closed-end funds (including all of their portfolios) advised by the Investment Adviser and any funds that have an investment adviser that is an affiliated person of the Investment Adviser (including, but not limited to, Morgan Stanley Investment Management Inc.).

39

Morgan Stanley U.S. Government Securities Trust

Trustee and Officer Information (unaudited) continued

Executive Officers:

Name, Age and Address of Executive Officer	Position(s) Held with Registrant	Term of Office and Length of Time Served*	Principal Occupation(s) During Past 5 Years
Ronald E. Robison (69) 522 Fifth Avenue New York, NY 10036	President and Principal Executive Officer	President since September 2005 and Principal Executive Officer since May 2003	President (since September 2005) and Principal Executive Officer (since May 2003) of funds in the Fund Complex; President (since September 2005) and Principal Executive Officer (since May 2003) of the Van Kampen Funds; Managing Director, Director and/or Officer of the Investment Adviser and various entities affiliated with the Investment Adviser; Director of Morgan Stanley SICAV (since May 2004). Formerly, Executive Vice President (July 2003-September 2005) of funds in the Fund Complex and the Van Kampen Funds; President and Director of the Institutional Funds (March 2001-July 2003); Chief Administrative Officer of the Investment Adviser; Chief Administrative Officer of Morgan Stanley Services Company Inc.
J. David Germany (53) Morgan Stanley Investment Management Limited 20 Bank Street Canary Wharf, London, England E14 4AD	Vice President	Since February 2006	Managing Director and (since December 2005) Chief Investment Officer – Global Fixed Income of Morgan Stanley Investment Management; Managing Director and Director of Morgan Stanley Investment Management Limited; Vice President of the Retail Funds and Institutional Funds (since February 2006).
Dennis F. Shea (54) 522 Fifth Avenue New York, NY 10036	Vice President	Since February 2006	Managing Director and (since February 2006) Chief Investment Officer – Global Equity of Morgan Stanley Investment Management; Vice President of the Retail Funds and Institutional Funds (since February 2006). Formerly, Managing Director and Director of Global Equity Research at Morgan Stanley.
Amy R. Doberman (45) 522 Fifth Avenue New York, NY 10036	Vice President	Since July 2004	Managing Director and General Counsel, U.S. Investment Management of Morgan Stanley Investment Management (since July 2004); Vice President of the Retail Funds and Institutional Funds (since July 2004); Vice President of the Van Kampen Funds (since August 2004); Secretary (since February 2006) and Managing Director (since July 2004) of the Investment Adviser and various entities affiliated with the Investment Adviser. Formerly, Managing Director and General Counsel – Americas, UBS Global Asset Management (July 2000-July 2004).
Carsten Otto (44) 522 Fifth Avenue New York, NY 10036	Chief Compliance Officer	Since October 2004	Managing Director and Global Head of Compliance for Morgan Stanley Investment Management (since April 2007); and Chief Compliance Officer of Morgan Stanley Retail Funds and Institutional Funds (since October 2004). Formerly, U.S. Director of Compliance (October 2004-April 2007) and Assistant Secretary and Assistant General Counsel of the Retail Funds.
Stefanie V. Chang Yu (41) 522 Fifth Avenue New York, NY 10036	Vice President	Since December 1997	Managing Director of the Investment Adviser and various entities affiliated with the Investment Adviser; Vice President of the Retail Funds (since July 2002) and the Institutional Funds (since December 1997). Formerly, Secretary of various entities affiliated with the Investment Adviser.

40

Morgan Stanley U.S. Government Securities Trust

Trustee and Officer Information (unaudited) continued

Name, Age and Address of Executive Officer	Position(s) Held with Registrant	Term of Office and Length of Time Served*	Principal Occupation(s) During Past 5 Years
Francis J. Smith (42) c/o Morgan Stanley Trust Harborside Financial Center Plaza Two Jersey City, NJ 07311	Treasurer and Chief Financial Officer	Treasurer since July 2003 and Chief Financial Officer since September 2002	Executive Director of the Investment Adviser and various entities affiliated with the Investment Adviser; Treasurer and Chief Financial Officer of the Retail Funds (since July 2003). Formerly, Vice President of the Retail Funds (September 2002-July 2003).
Mary E. Mullin (40) 522 Fifth Avenue New York, NY 10036	Secretary	Since June 1999	Executive Director of the Investment Adviser and various entities affiliated with the Investment Adviser; Secretary of the Retail Funds (since July 2003) and the Institutional Funds (since June 1999).

* This is the earliest date the Officer began serving the Retail Funds or Institutional Funds.

2007 Federal Tax Notice (unaudited)
For Federal income tax purposes, the following information is furnished with respect to the distributions paid by the Fund during its taxable year ended December 31, 2007. 38.48% of the Fund's dividends was attributable to qualifying U.S. Government obligations. (Please consult your tax advisor to determine if any portion of the dividends you received is exempt from state income tax.)
In January, the Fund provides tax information to shareholders for the preceding calendar year.

41

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Trustees

Frank L. Bowman
Michael Bozic
Kathleen A. Dennis
James F. Higgins
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Michael E. Nugent
W. Allen Reed
Fergus Reid

Officers

Michael E. Nugent
Chairperson of the Board

Ronald E. Robison
President and Principal Executive Officer

J. David Germany
Vice President

Dennis F. Shea
Vice President

Amy R. Doberman
Vice President

Carsten Otto
Chief Compliance Officer

Stefanie V. Chang Yu
Vice President

Francis J. Smith
Treasurer and Chief Financial Officer

Mary E. Mullin
Secretary

Transfer Agent

Morgan Stanley Trust
Harborside Financial Center, Plaza Two
Jersey City, New Jersey 07311

Independent Registered Public Accounting Firm

Deloitte & Touche LLP
Two World Financial Center
New York, New York 10281

Legal Counsel

Clifford Chance US LLP
31 West 52nd Street
New York, New York 10019

Counsel to the Independent Trustees

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Investment Adviser

Morgan Stanley Investment Advisors Inc.
522 Fifth Avenue
New York, New York 10036

This report is submitted for the general information of the shareholders of the Fund. For more detailed information about the Fund, its fees and expenses and other pertinent information, please read its Prospectus. The Fund's Statement of Additional Information contains additional information about the Fund, including its trustees. It is available, without charge, by calling (800) 869-NEWS.

This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective Prospectus. Read the Prospectus carefully before investing.

Morgan Stanley Distributors Inc., member FINRA.

© 2007 Morgan Stanley

USGANN
IU08–00870P–Y12/07

MORGAN STANLEY FUNDS

Morgan Stanley
U.S. Government
Securities Trust

Annual Report

December 31, 2007

Item 2.  Code of Ethics.

(a)The Fund has adopted a code of ethics (the “Code of Ethics”) that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the Fund or a third party.

(b)No information need be disclosed pursuant to this paragraph.

(c)Not applicable.

(d)Not applicable.

(e)Not applicable.

(f)

(1)The Fund’s Code of Ethics is attached hereto as Exhibit 12 A.

(2)Not applicable.

(3)Not applicable.

Item 3.  Audit Committee Financial Expert.

The Fund’s Board of Trustees has determined that Joseph J. Kearns, an “independent” Trustee, is an “audit committee financial expert” serving on its audit committee. Under applicable securities laws, a person who is determined to be an audit committee financial expert will not be deemed an “expert” for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification of a person as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities that are greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and Board of Trustees in the absence of such designation or identification

Item 4.  Principal Accountant Fees and Services.

(a)(b)(c)(d) and (g).  Based on fees billed for the periods shown:

2007

	Registrant			Covered Entities(1)
Audit Fees	$	46,250		N/A
Non-Audit Fees
Audit-Related Fees	$		(2)	$	6,121,000	(2)
Tax Fees	$	4,841	(3)	$	964,000	(4)
All Other Fees	$		(5)	$		(5)
Total Non-Audit Fees	$	4,841		$	7,085,000
Total	$	51,091		$	7,085,000

2006

	Registrant			Covered Entities(1)
Audit Fees	$	45,700		N/A
Non-Audit Fees
Audit-Related Fees	$	531	(2)	$	5,162,000	(2)
Tax Fees	$	5,150	(3)	$	1,389,000	(4)
All Other Fees	$		(5)	$		(5)
Total Non-Audit Fees	$	5,681		$	6,551,000
Total	$	51,381		$	6,551,000

N/A- Not applicable, as not required by Item 4.

(1)Covered Entities include the Adviser (excluding sub-advisors) and any entity controlling, controlled by or under common control with the Adviser that provides ongoing services to the Registrant.

(2)Audit-Related Fees represent assurance and related services provided that are reasonably related to the performance of the audit of the financial statements of the Covered Entities’ and funds advised by the Adviser or its affiliates, specifically data verification and agreed-upon procedures related to asset securitizations and agreed-upon procedures engagements.

(3)Tax Fees represent tax compliance, tax planning and tax advice services provided in connection with the preparation and review of the Registrant’s tax returns.

(4)Tax Fees represent tax compliance, tax planning and tax advice services provided in connection with the review of Covered Entities’ tax returns.

(5)All other fees represent project management for future business applications and improving business and operational processes.

(e)(1) The audit committee’s pre-approval policies and procedures are as follows:

APPENDIX A

AUDIT COMMITTEE

AUDIT AND NON-AUDIT SERVICES

PRE-APPROVAL POLICY AND PROCEDURES

OF THE

MORGAN STANLEY RETAIL AND INSTITUTIONAL FUNDS

AS ADOPTED AND AMENDED JULY 23, 2004,(1)

1.Statement of Principles

The Audit Committee of the Board is required to review and, in its sole discretion, pre-approve all Covered Services to be provided by the Independent Auditors to the Fund and Covered Entities in order to assure that services performed by the Independent Auditors do not impair the auditor’s independence from the Fund.

The SEC has issued rules specifying the types of services that an independent auditor may not provide to its audit client, as well as the audit committee’s administration of the engagement of the independent auditor. The SEC’s rules establish two different approaches to pre-approving services, which the SEC considers to be equally valid. Proposed services either: may be pre-approved without consideration of specific case-by-case services by the Audit Committee (“general pre-approval”); or require the specific pre-approval of the Audit Committee or its delegate (“specific pre-approval”). The Audit Committee believes that the combination of these two approaches in this Policy will result in an effective and efficient procedure to pre-approve services performed by the Independent Auditors.  As set forth in this Policy, unless a type of service has received general pre-approval, it will require specific pre-approval by the Audit Committee (or by any member of the Audit Committee to which pre-approval authority has been delegated) if it is to be provided by the Independent Auditors. Any proposed services exceeding pre-approved cost levels or budgeted amounts will also require specific pre-approval by the Audit Committee.

The appendices to this Policy describe the Audit, Audit-related, Tax and All Other services that have the general pre-approval of the Audit Committee. The term of any general pre-approval is 12 months from the date of pre-approval, unless the Audit Committee considers and provides a different period and states otherwise. The Audit Committee will annually review and pre-approve the services that may be provided by the Independent Auditors without obtaining specific pre-approval from the Audit Committee.  The Audit Committee will add to or subtract from the list of general pre-approved services from time to time, based on subsequent determinations.

(1)This Audit Committee Audit and Non-Audit Services Pre-Approval Policy and Procedures (the “Policy”), adopted as of the date above, supersedes and replaces all prior versions that may have been adopted from time to time.

The purpose of this Policy is to set forth the policy and procedures by which the Audit Committee intends to fulfill its responsibilities.  It does not delegate the Audit Committee’s responsibilities to pre-approve services performed by the Independent Auditors to management.

The Fund’s Independent Auditors have reviewed this Policy and believes that implementation of the Policy will not adversely affect the Independent Auditors’ independence.

2.Delegation

As provided in the Act and the SEC’s rules, the Audit Committee may delegate either type of pre-approval authority to one or more of its members.  The member to whom such authority is delegated must report, for informational purposes only, any pre-approval decisions to the Audit Committee at its next scheduled meeting.

3.Audit Services

The annual Audit services engagement terms and fees are subject to the specific pre-approval of the Audit Committee.  Audit services include the annual financial statement audit and other procedures required to be performed by the Independent Auditors to be able to form an opinion on the Fund’s financial statements.  These other procedures include information systems and procedural reviews and testing performed in order to understand and place reliance on the systems of internal control, and consultations relating to the audit.  The Audit Committee will approve, if necessary, any changes in terms, conditions and fees resulting from changes in audit scope, Fund structure or other items.

In addition to the annual Audit services engagement approved by the Audit Committee, the Audit Committee may grant general pre-approval to other Audit services, which are those services that only the Independent Auditors reasonably can provide. Other Audit services may include statutory audits and services associated with SEC registration statements (on Forms N-1A, N-2, N-3, N-4, etc.), periodic reports and other documents filed with the SEC or other documents issued in connection with securities offerings.

The Audit Committee has pre-approved the Audit services in Appendix B.1.  All other Audit services not listed in Appendix B.1 must be specifically pre-approved by the Audit Committee (or by any member of the Audit Committee to which pre-approval has been delegated).

4.Audit-related Services

Audit-related services are assurance and related services that are reasonably related to the performance of the audit or review of the Fund’s financial statements and, to the extent they are Covered Services, the Covered Entities or that are traditionally performed by the Independent Auditors. Because the Audit Committee believes that the provision of Audit-related services does not impair the independence of the auditor and is consistent with the SEC’s rules on auditor independence, the Audit Committee may grant general pre-approval to Audit-related services. Audit-related services include, among others, accounting consultations related to accounting, financial reporting or disclosure matters

not classified as “Audit services”; assistance with understanding and implementing new accounting and financial reporting guidance from rulemaking authorities; agreed-upon or expanded audit procedures related to accounting and/or billing records required to respond to or comply with financial, accounting or regulatory reporting matters; and assistance with internal control reporting requirements under Forms N-SAR and/or N-CSR.

The Audit Committee has pre-approved the Audit-related services in Appendix B.2. All other Audit-related services not listed in Appendix B.2 must be specifically pre-approved by the Audit Committee (or by any member of the Audit Committee to which pre-approval has been delegated).

5.Tax Services

The Audit Committee believes that the Independent Auditors can provide Tax services to the Fund and, to the extent they are Covered Services, the Covered Entities, such as tax compliance, tax planning and tax advice without impairing the auditor’s independence, and the SEC has stated that the Independent Auditors may provide such services.

Pursuant to the preceding paragraph, the Audit Committee has pre-approved the Tax Services in Appendix B.3. All Tax services in Appendix B.3 must be specifically pre-approved by the Audit Committee (or by any member of the Audit Committee to which pre-approval has been delegated).

6.All Other Services

The Audit Committee believes, based on the SEC’s rules prohibiting the Independent Auditors from providing specific non-audit services, that other types of non-audit services are permitted. Accordingly, the Audit Committee believes it may grant general pre-approval to those permissible non-audit services classified as All Other services that it believes are routine and recurring services, would not impair the independence of the auditor and are consistent with the SEC’s rules on auditor independence.

The Audit Committee has pre-approved the All Other services in Appendix B.4. Permissible All Other services not listed in Appendix B.4 must be specifically pre-approved by the Audit Committee (or by any member of the Audit Committee to which pre-approval has been delegated).

7.Pre-Approval Fee Levels or Budgeted Amounts

Pre-approval fee levels or budgeted amounts for all services to be provided by the Independent Auditors will be established annually by the Audit Committee. Any proposed services exceeding these levels or amounts will require specific pre-approval by the Audit Committee. The Audit Committee is mindful of the overall relationship of fees for audit and non-audit services in determining whether to pre-approve any such services.

8.Procedures

All requests or applications for services to be provided by the Independent Auditors that do not require specific approval by the Audit Committee will be submitted to the Fund’s Chief Financial Officer and must include a detailed description of the services to be

rendered. The Fund’s Chief Financial Officer will determine whether such services are included within the list of services that have received the general pre-approval of the Audit Committee. The Audit Committee will be informed on a timely basis of any such services rendered by the Independent Auditors. Requests or applications to provide services that require specific approval by the Audit Committee will be submitted to the Audit Committee by both the Independent Auditors and the Fund’s Chief Financial Officer, and must include a joint statement as to whether, in their view, the request or application is consistent with the SEC’s rules on auditor independence.

The Audit Committee has designated the Fund’s Chief Financial Officer to monitor the performance of all services provided by the Independent Auditors and to determine whether such services are in compliance with this Policy. The Fund’s Chief Financial Officer will report to the Audit Committee on a periodic basis on the results of its monitoring. Both the Fund’s Chief Financial Officer and management will immediately report to the chairman of the Audit Committee any breach of this Policy that comes to the attention of the Fund’s Chief Financial Officer or any member of management.

9.Additional Requirements

The Audit Committee has determined to take additional measures on an annual basis to meet its responsibility to oversee the work of the Independent Auditors and to assure the auditor’s independence from the Fund, such as reviewing a formal written statement from the Independent Auditors delineating all relationships between the Independent Auditors and the Fund, consistent with Independence Standards Board No. 1, and discussing with the Independent Auditors its methods and procedures for ensuring independence.

10.Covered Entities

Covered Entities include the Fund’s investment adviser(s) and any entity controlling, controlled by or under common control with the Fund’s investment adviser(s) that provides ongoing services to the Fund(s). Beginning with non-audit service contracts entered into on or after May 6, 2003, the Fund’s audit committee must pre-approve non-audit services provided not only to the Fund but also to the Covered Entities if the engagements relate directly to the operations and financial reporting of the Fund. This list of Covered Entities would include:

Morgan Stanley Retail Funds

Morgan Stanley Investment Advisors Inc.

Morgan Stanley & Co. Incorporated

Morgan Stanley DW Inc.

Morgan Stanley Investment Management Inc.

Morgan Stanley Investment Management Limited

Morgan Stanley Investment Management Private Limited

Morgan Stanley Asset & Investment Trust Management Co., Limited

Morgan Stanley Investment Management Company

Van Kampen Asset Management

Morgan Stanley Services Company, Inc.

Morgan Stanley Distributors Inc.

Morgan Stanley Trust FSB

Morgan Stanley Institutional Funds

Morgan Stanley Investment Management Inc.

Morgan Stanley Investment Advisors Inc.

Morgan Stanley Investment Management Limited

Morgan Stanley Investment Management Private Limited

Morgan Stanley Asset & Investment Trust Management Co., Limited

Morgan Stanley Investment Management Company

Morgan Stanley & Co. Incorporated

Morgan Stanley Distribution, Inc.

Morgan Stanley AIP GP LP

Morgan Stanley Alternative Investment Partners LP

(e)(2)  Beginning with non-audit service contracts entered into on or after May 6, 2003, the audit committee also is required to pre-approve services to Covered Entities to the extent that the services are determined to have a direct impact on the operations or financial reporting of the Registrant. 100% of such services were pre-approved by the audit committee pursuant to the Audit Committee’s pre-approval policies and procedures (attached hereto).

(f)Not applicable.

(g)See table above.

(h)The audit committee of the Board of Trustees has considered whether the provision of services other than audit services performed by the auditors to the Registrant and Covered Entities is compatible with maintaining the auditors’ independence in performing audit services.

Item 5. Audit Committee of Listed Registrants.

(a)The Fund has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act whose members are: Joseph Kearns, Michael Nugent and Allen Reed.

(b) Not applicable.

Item 6. Schedule of Investments

Refer to Item 1.

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

Applicable only to reports filed by closed-end funds.

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

Applicable only to reports filed by closed-end funds.

Item 9. Closed-End Fund Repurchases

Applicable only to reports filed by closed-end funds.

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

Not applicable.

Item 11. Controls and Procedures

(a)  The Fund’s principal executive officer and principal financial officer have concluded that the Fund’s disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Fund in this Form N-CSR 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 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.

Item 12. Exhibits

(a) The Code of Ethics for Principal Executive and Senior Financial Officers is attached hereto.

(b) A separate certification for each principal executive officer and principal financial officer of the registrant are attached hereto as part of EX-99.CERT.

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 U.S. Government Securities Trust

/s/ Ronald E. Robison

Ronald E. Robison

Principal Executive Officer

February 15, 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/ Ronald E. Robison

Ronald E. Robison

Principal Executive Officer

February 15, 2008

/s/ Francis Smith

Francis Smith

Principal Financial Officer

February 15, 2008