EXHIBIT 5

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

March 30, 2000

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
500,000 shares of the Company's Common Stock, $0.01 par value (the "Shares"),
pursuant to the Company's 401(k) Savings Plan (the "Plan").

     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 Plan, 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