EXHIBIT 5

                         BAKER & DANIELS
                    300 NORTH MERIDIAN STREET
                           SUITE 2700
                  INDIANAPOLIS, INDIANA  46204
                         (317) 237-0300


September 27, 1999


Interactive Intelligence, Inc.
8909 Purdue Road
Suite 300
Indianapolis, Indiana  46268

     Re:  Registration Statement on Form S-8

Ladies and Gentlemen:

     We  have acted as counsel to Interactive Intelligence, Inc.,
an Indiana  corporation  (the  "Company"), in connection with the
preparation  and  filing  with  the   Securities   and   Exchange
Commission  (the  "Commission")  of  the  Company's  Registration
Statement  on  Form S-8 (the "Registration Statement") under  the
Securities Act of  1933  (the  "Act"),  registering the offer and
sale  of  up to 5,863,704 shares of the Company's  Common  Stock,
$0.01 par value  (the  "Shares"),  pursuant to the Company's 1995
Incentive Stock Option Plan, as amended,  1995 Nonstatutory Stock
Option  Incentive  Plan,  1999 Stock Option and  Incentive  Plan,
Outside Directors Stock Option  Plan,  as  amended (the "Plans"),
Stock Option Agreement between the Company and  Donald  E. Brown,
M.D.,  dated  September  22, 1998, Stock Option Agreement between
the Company and Jon Anton,  D.Sc.,  dated May 26, 1999, and Stock
Option Agreement between the Company  and  Michael P.  Cullinane,
dated May 26, 1999 (the "Stock Option Agreements").

     In  so  acting,  we  have  examined  and  relied   upon  the
originals,  or  copies  certified or otherwise identified to  our
satisfaction, of such records, documents and other instruments as
in our judgment are necessary  or  appropriate  to  enable  us to
render the opinion expressed below.

     Based  on  the  foregoing,  we  are  of the opinion that the
Shares  have  been  duly  authorized and, when  the  Registration
Statement shall have become  effective  and  the Shares have been
issued  in  accordance  with  the  Plans  or  the  Stock   Option
Agreements,  the  Shares  will  be validly issued, fully paid and
nonassessable.

     Our opinion expressed above is limited to the federal law of
the United States and the law of the State of Indiana.

     We  hereby  consent to the filing  of  this  opinion  as  an
exhibit to the Registration  Statement.   In giving such consent,
we  do  not thereby concede that we are within  the  category  of
persons whose  consent  is required under Section 7 of the Act or
the Rules and Regulations of the Commission thereunder.

                                        Very truly yours,

                                        /s/ BAKER & DANIELS