UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No.)

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[  ]    Soliciting Material Under Rule 14a-12

Investment Grade Municipal Income Fund Inc.

(Name of Registrant as Specified In Its Charter)

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Investment Grade Municipal Income Fund Inc.
(New York Stock Exchange Trading Symbol: PPM)

1285 Avenue of the Americas
New York, New York 10019-6028

January 6, 2010

Dear Valued Shareholder:

Important information regarding a special stockholders meeting of Investment Grade Municipal Income Fund Inc. is enclosed. We encourage you to review it carefully.

On December 1, 2009, the Board of Directors announced that it has determined to hold a special stockholders meeting in lieu of the previously announced 2010 annual stockholders meeting. At the special meeting, stockholders (herein referred to as “shareholders”) will be asked to consider and vote solely upon a proposal to liquidate and dissolve the Fund. While this proposal is discussed in much greater detail in the enclosed Proxy Statement, which we urge you to review carefully, we have prepared answers to what we anticipate may be some of your questions on the next few pages.

For the reasons set forth in the Proxy Statement, the Board unanimously recommends that you vote FOR the proposal to liquidate and dissolve the Fund. Please use the enclosed proxy card to authorize the named proxies to cast your votes TODAY by signing, dating and returning your proxy card in the enclosed postage-paid envelope. You may also have the ability to submit a proxy by telephone or Internet; please consult the enclosed proxy card or voting instruction form for further guidance.

On behalf of the Board of Directors, I thank you for your continued support.

Sincerely,

Richard Q. Armstrong

Independent Chairman of the Board

Some Questions and Answers Regarding the Proposed Liquidation and Dissolution

By its very nature, the following “Questions and Answers” section is a summary and is not intended to be as detailed as the discussion found later in the materials. For that reason, the information below is qualified in its entirety by reference to the enclosed Proxy Statement and the Plan of Liquidation, which is appended thereto as Exhibit A.

What factors did the Board consider in determining to recommend the Liquidation Proposal?

The Board of Directors (the “Board”), after careful deliberation and a thorough review of the available alternatives and circumstances, determined that a proposal to liquidate and dissolve the Fund (the “Liquidation Proposal”) would be in the best interests of the Fund, and unanimously adopted and approved a Plan of Liquidation subject to the approval of the Fund’s shareholders at a special meeting of shareholders (the “Special Meeting”). The Board weighed a variety of factors, including (in no particular order):

•		anticipated benefits to all shareholders that would result from liquidation;
•		the Fund’s relative performance and trading discount;
•		the Fund’s history with shareholder initiatives;
•		the recommendation of the Fund’s investment advisor and its management team;
•		possible long-term investor sentiment;
•		increased expenses resulting from successive proxy contests;
•		vulnerability to confrontations with large shareholders;
•		possible alternatives to liquidation; and
•		the indications received from Western Investment LLC (“Western”) and Karpus Investment Management (“Karpus”) that they would each be willing to support the liquidation proposal.

The Board concluded that, notwithstanding the Fund’s strong performance relative to its peers and recent narrowing of its discount, liquidation and dissolution would be in the best interests of the Fund. In particular, the Board considered that liquidation and dissolution would be beneficial to all shareholders; the Fund has been the recipient of successive proposals from large shareholders and that successive dealings with large shareholders could have the cumulative effect of diverting resources away from Fund operations and hampering management’s efforts to improve the value of an investment in the Fund; and responding to shareholder proposals would likely continue to increase the expenses of the Fund, to the detriment of its shareholders. The Board also considered whether there were other alternatives available that might allow the Fund to continue to operate successfully and profitably for all shareholders. However, on balance, the Board—consistent with the recommendation of Fund management—determined that liquidation and dissolution would be the best option.

The Board recognizes that liquidation and dissolution is an extraordinary action, and it does not make this proposal lightly. The Board acknowledges that it has taken a stance against liquidation in the past.

However, given the totality of the circumstances outlined above, the Board believes that liquidation and dissolution is the best alternative. In recommending liquidation and dissolution, the Board is also mindful of the knowledge and experience of UBS Global Asset Management (Americas) Inc. (“UBS Global AM”), which it believes is well positioned to enable shareholders to realize the best value for their shares in an orderly liquidation.

Why is the board asking shareholders to consider the Liquidation Proposal at the Special Meeting, rather than at an annual meeting?

As described in greater detail in the Proxy Statement, on December 1, 2009, the Fund announced that the Board had determined to hold the Special Meeting solely for the purpose of considering the Liquidation Proposal, in lieu of the previously announced annual meeting (the “2010 Annual Meeting”).

The Board believes that it would be in the best interests of the Fund and all of its shareholders to hold the Special Meeting solely to consider the Liquidation Proposal in an effort to prevent a possibly lengthy and costly confrontation with Western and/or Karpus, each of which had submitted its own proposal to be considered at the 2010 Annual Meeting. Proceeding in this manner should help avoid a contested meeting, which could result in an expensive “proxy battle.” A contested meeting would make it more difficult and expensive for the Fund and its proxy solicitor to solicit votes on the Liquidation Proposal, which already was on the agenda for the 2010 Annual Meeting. The Fund’s 2009 Annual Meeting was contested. In addition, the Board considered that because of the importance of the Liquidation Proposal, and in order to avoid distraction by other proposals, holding the Special Meeting solely for the purpose of considering this proposal was desirable.

Western and Karpus have informed the Fund that each supports the Liquidation Proposal. Based on public filings made by Karpus on July 22, 2009 and by Western on September 14, 2009, Western and Karpus collectively own approximately 18.77% of the Fund’s outstanding common stock.

The Board determined to cancel the previously scheduled 2010 Annual Meeting, and schedule the Special Meeting, after Western and Karpus each indicated support for the Liquidation Proposal and a desire to proceed to a special meeting solely for the purpose of considering the Liquidation Proposal.

The Fund had previously scheduled its 2010 Annual Meeting for the purpose of considering: (1) the election of directors; (2) a proposal to liquidate and dissolve the Fund; (3) a proposal from Karpus that the Fund conduct a tender offer for all of its outstanding shares; and (4) a proposal from Western recommending that the Fund’s Board be prohibited from retaining UBS Global AM and certain other entities as investment manager for the Fund. The Fund also had received notice of Western’s intent to nominate its own slate of individuals for election to the Fund’s Board at the 2010 Annual Meeting. If the Liquidation Proposal is approved at the Special Meeting, the Fund would not hold the 2010 Annual Meeting.

If the Liquidation Proposal is approved at the Special Meeting, what will happen next?

If the Liquidation Proposal is approved by shareholders, the Fund does not intend to hold an annual meeting later in 2010, but instead management will proceed to liquidate and dissolve the Fund. The Plan of Liquidation would become effective as of the date of its approval by shareholders. As soon as reasonably practicable thereafter, the Board would determine a “cessation date” after which the Fund would cease its business as an investment company and would not engage in any business activities except for the

purpose of winding up its business and affairs, preserving the value of its assets, liquidating portfolio securities, discharging or making reasonable provision for the payment of all liabilities and distributing its remaining assets to shareholders.

What if the Liquidation Proposal is not approved at the Special Meeting?

If the Liquidation Proposal is not approved by shareholders, the Fund will call an annual meeting for 2010, and Western and Karpus have each informed the Fund that they intend to have each of their shareholder proposals considered at that time. Western also informed the Fund that it intends to nominate its own slate of individuals for election to the Fund’s Board.

Who is eligible to vote on the Liquidation Proposal?

Holders of both common stock and auction preferred shares (“APS”) of record as of the close of business on December 29, 2009 are entitled to vote at the meeting.

How does the Board recommend that I vote?

The Board recommends that you vote “FOR” the Liquidation Proposal.

What vote is required to approve the Liquidation Proposal?

The approval of the Liquidation Proposal requires the affirmative vote of a majority of the votes entitled to be cast (with holders of common stock and APS voting together as a single class) on the proposal.

How would liquidation and dissolution affect the Fund and my investment?

If the Liquidation Proposal is approved by the Fund’s shareholders, the Fund’s assets will be sold and, after paying or setting aside reserves for the payment of liabilities, the proceeds will be distributed to the Fund’s shareholders and the Fund will be dissolved pursuant to the Plan of Liquidation. Holders of APS will receive the APS’ liquidation preference of $50,000 per APS with certain dividends, as further discussed below. Shareholders should carefully read and consider the discussion of this proposal and the Plan of Liquidation in the Proxy Statement.

How would liquidation and dissolution impact the Fund’s APS holders?

Holders of the Fund’s APS would be entitled to receive the APS’ full liquidation preference of $50,000 per share plus the accumulated but unpaid dividends on the APS. This would provide APS holders with liquidity for their shares, which the Board believes would be attractive in light of the continuing “failures” of APS auctions that have resulted in a severe diminishment of liquidity for APS holders.

Where do I find further information about the Liquidation Proposal?

Further information about the Liquidation Proposal, including the tax implications of the proposed liquidation and dissolution, is available in the attached Proxy Statement.

	Investment Grade Municipal Income Fund Inc.
	Notice of special meeting of shareholders
	February 23, 2010
	To the shareholders:
	A special meeting of stockholders (herein referred to as “shareholders”) of Investment Grade Municipal Income Fund Inc., a Maryland corporation (the “Fund”), will be held on February 23, 2010, at 10:00 a.m., Eastern time, on the 14th Floor of the UBS Building located at 1285 Avenue of the Americas, New York, New York for the following purpose:
	Matter to be voted upon by all shareholders:
	To consider and vote upon a proposal that the Fund be liquidated and dissolved pursuant to a Plan of Liquidation.
	You are entitled to vote at the meeting and any adjournment or postponement thereof if you owned Fund shares at the close of business on December 29, 2009. If you attend the meeting, you may cast your votes in person. If you do not expect to attend the meeting, please complete, date, sign and return the enclosed proxy card in the enclosed postage paid envelope. You may also have the ability to submit a proxy by telephone or Internet; please consult the enclosed proxy card or voting instruction for further guidance.
	Whether or not you plan to attend the meeting, and regardless of the number of shares you own, we urge you to authorize the named proxies to cast your votes FOR the Proposal by promptly completing, signing, dating and returning the enclosed proxy card or, if applicable, following the instructions on the proxy card or voting instruction form to submit a proxy by Internet or telephone. Your prompt return of the enclosed proxy card will save the Fund the necessity and expense of further solicitations to ensure a quorum at the special meeting.
	By order of the board of directors,
	Mark F. Kemper
	Vice President and Secretary
	January 6, 2010
	1285 Avenue of the Americas
	New York, New York 10019-6028

	Your vote is important no matter how many shares you own Please indicate your voting instructions on the enclosed proxy card, date and sign it, and return it in the postage paid envelope provided. If you sign, date and return the proxy card but give no voting instructions, your shares will be voted “FOR” the proposed liquidation and dissolution of the Fund, and, in the proxies’ discretion, either “FOR” or “AGAINST” any other procedural matters that may properly arise at the Special Meeting. In order to avoid the additional expense to the Fund of further solicitation, we ask your cooperation in mailing in your proxy card promptly. (You may also have the ability to submit a proxy by telephone or Internet; please consult the enclosed proxy card or voting instruction form for further guidance.)

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Instructions for signing proxy cards

The following general guidelines for signing proxy cards may be of assistance to you and avoid the time and expense to the Fund in validating your vote if you fail to sign your proxy card properly.

1.		Individual accounts: Sign your name exactly as it appears in the registration on the proxy card.
2.		Joint accounts: Either party may sign, but the name of the party signing should conform exactly to the name shown in the registration on the proxy card.
3.		All other accounts: The capacity of the individual signing the proxy card should be indicated unless it is reflected in the form of registration. For example:

Registration				Valid signature
Corporate accounts
(1)		ABC Corp.		ABC Corp.
				John Doe, treasurer
(2)		ABC Corp.		John Doe, treasurer
(3)		ABC Corp. c/o John Doe, treasurer		John Doe
(4)		ABC Corp. profit sharing plan		John Doe, trustee
Partnership accounts
(1)		The XYZ partnership		Jane B. Smith, partner
(2)		Smith and Jones, limited partnership		Jane B. Smith, general partner
Trust accounts
(1)		ABC trust account		Jane B. Doe, trustee
(2)		Jane B. Doe, trustee u/t/d 12/18/78		Jane B. Doe
Custodial or estate accounts
(1)		John B. Smith, Cust. f/b/o
		John B. Smith, Jr. UGMA/UTMA		John B. Smith
(2)		Estate of John B. Smith		John B. Smith, Jr., executor

Table of Contents
Introduction		1
The Proposal: Liquidation and dissolution of the Fund		2
Rationale for the proposed liquidation and dissolution		2
Consideration of the proposed liquidation and dissolution at the Special Meeting		3
Mechanics of the proposed liquidation and dissolution		5
Other information		7
Beneficial ownership of shares		7
Shareholder proposals		8
Currency of information		9
Solicitation of proxies		9
Important notice regarding the availability of proxy materials for the special meeting of shareholders to be held on February 23, 2010		9
Other business		10
Exhibit A—Form of Plan of Liquidation		A-1

Investment Grade Municipal Income Fund Inc.

1285 Avenue of the Americas
New York, New York 10019-6028

Introduction

Quorum.  The presence of shareholders entitled to cast a majority of the votes entitled to be cast, in person or by proxy, is necessary to constitute a quorum for the transaction of business at the Special Meeting. Shareholders of record at the close of business on December 29, 2009 are entitled to notice of, and to vote at, the Special Meeting. In the event that a quorum is not present at the Special Meeting or in the event that a quorum is present but sufficient votes to approve the proposal are not received, the chairman of the meeting or, if a proposal to adjourn is submitted to a vote of shareholders, the holders of a majority of the shares present in person or by proxy (or by a majority of votes cast on the adjournment if a quorum is present) will have the power to adjourn the meeting from time to time, without notice other than announcement at the Special Meeting, until the requisite number of shares entitled to vote at the Special Meeting is present.

Required vote for adoption of proposal.  The proposal, to consider and vote upon the liquidation and dissolution of the Fund (the “Liquidation Proposal”), requires the affirmative vote of a majority of the votes entitled to be cast at the meeting (with holders of common stock and auction preferred shares (“APS”) voting together as a single class) on the proposal, provided a quorum is present.

Each full share of the Fund’s common stock or APS is entitled to one vote, and each fractional share of the Fund’s common stock or APS is entitled to a proportionate share of one vote.

A broker non-vote occurs when the broker returns a properly executed proxy for shares held by the broker for a customer but does not vote on a matter because the broker does not have discretionary voting authority and has not received instructions from the beneficial owner. Abstentions and broker non-votes, if any, will be counted as shares present for purposes of determining whether a quorum is present but will not be voted for or against any proposal. Abstentions and broker non-votes will have the effect of a vote against the Liquidation Proposal.

The individuals named as proxies on the enclosed proxy card will vote in accordance with your direction as indicated thereon if your proxy card is received properly executed by you or by your duly appointed agent or attorney-in-fact. If you give no voting instructions, your shares will be voted FOR the Liquidation Proposal, and, in the proxies’ discretion, either FOR or AGAINST any other procedural matters that may properly be presented at the Special Meeting.

You may revoke any proxy by giving another proxy or by submitting a written notice of revocation to the Fund’s Secretary, care of UBS Global Asset Management (Americas) Inc., at UBS Tower, One North Wacker Drive, Chicago, IL 60606. To be effective, your revocation must be received by the Fund prior to the Special Meeting and must indicate your name and account number. In addition, if you attend the Special Meeting in person you may, if you wish, vote in person at the meeting, thereby cancelling any proxy previously given.

As of the close of business on the record date, December 29, 2009, the Fund had outstanding 10,356,667 shares of common stock and 1,600 shares of the APS, comprised of 582 Series A shares, 582 Series B shares and 436 Series C shares.

The Fund has made arrangements for assistance with the solicitation of proxies, as described in the section below entitled, “Solicitation of Proxies.”

The Fund’s annual report containing financial statements for the fiscal year ended September 30, 2009 has previously been mailed to shareholders. Shareholders may request additional copies of the Fund’s annual report, without charge, by writing the Fund c/o Georgeson Inc., Wall Street Station, PO Box 1100, New York, NY 10269-0646 or by calling toll-free 1-877-278-9670.

The Proposal: Liquidation and dissolution of the Fund

In determining to recommend to shareholders the liquidation and dissolution of the Fund, the Board considered a variety of factors, including (in no particular order):

•

Liquidation and dissolution would benefit all Fund shareholders.  The Board has concluded that the liquidation and dissolution of the Fund would be the best option for all of the Fund’s shareholders. APS holders would receive their liquidation preference and then common shareholders would receive net asset value (“NAV”) for their investment in the Fund through a “liquidating distribution.” Liquidation

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		would allow portfolio securities to be sold, the Fund’s leverage to be unwound and the proceeds distributed to common shareholders in an orderly and equitable manner. The Board and UBS Global AM believe that an orderly liquidation of the Fund’s portfolio holdings is very important for all shareholders and will help maximize shareholder value.
•		The Fund’s history with shareholder initiatives.  The current Board believes that successive proxy contests could have the cumulative effect of diverting resources away from Fund operations and hampering management’s efforts to implement new initiatives and to improve the value of an investment in the Fund.
•		Investor sentiment.  Current public filings show significant holdings of Fund common shares by large shareholders, including Western Investment LLC (“Western”) and Karpus Investment Management (“Karpus”), suggesting that a significant portion of the Fund’s common shares are held by shareholders who now have an agenda that is different from Fund management’s long-term, risk-aware approach to the stewardship of the Fund’s assets. The Board and UBS Global AM believe that the Fund’s shareholder base may not wish to see the Fund continue to operate under these circumstances and may prefer that the Fund be liquidated.
•		Increase in Fund expenses and expense ratio from successive proxy contests.  The Fund’s expenses and its expense ratio have increased over the last several years, due in part to the need to respond to shareholder initiatives and engage in costly proxy solicitations. Although successful in part, the solicitation for the Fund’s 2009 Annual Meeting was costly for the Fund and, given the large positions held by certain shareholders in the Fund, proxy battles and high solicitation expenses are likely for the foreseeable future, to the detriment of the Fund and its long-term investors.
•		Vulnerability to confrontations with large shareholders.  The Fund’s organizing documents, including its Charter and Bylaws, largely date from the Fund’s inception in 1992, and they lack certain protections now common among closed-end funds, the absence of which may make repeated confrontations with large shareholders more likely.

The Board is aware that UBS AG, for the benefit of and on behalf of, UBS Securities LLC and UBS Financial Services Inc. (“UBS Brokers”), affiliates of the Fund’s investment advisor, owned APS as a result of a settlement reached between the UBS Brokers and the Securities and Exchange Commission (the “SEC”) with respect to certain auction rate securities (including APS) sold by the UBS Brokers and/or held by customers in accounts with the UBS Brokers. Management assured the Board that it gave no weight to UBS AG’s ownership of APS in recommending the proposed liquidation and dissolution to the Board. This fact was recognized by the Board when it reached its determination that the proposed liquidation and dissolution would be in the best interests of the Fund, and, in light of management’s assurance, it was determined that such ownership did not present a material conflict of interest for the Fund’s investment advisor in recommending the proposed liquidation and dissolution to the Board. (Further information regarding the ownership positions of the UBS Brokers based on a review of public filings is available below.)

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The Board believes that it would be in the best interests of the Fund and all of its shareholders to hold the Special Meeting solely to consider the Liquidation Proposal in an effort to prevent a possibly lengthy and costly confrontation with Western and/or Karpus, each of which had submitted its own proposal to be considered at the 2010 Annual Meeting. Proceeding in this manner should help avoid a contested meeting, which could result in an expensive “proxy battle.” A contested meeting would make it more difficult and expensive for the Fund and its proxy solicitor to solicit votes on the Liquidation Proposal, which already was on the agenda for the 2010 Annual Meeting. The Fund’s 2009 Annual Meeting was contested. In addition, the Board considered that because of the importance of the Liquidation Proposal, and in order to avoid distraction by other proposals, holding the Special Meeting solely for the purpose of considering this proposal was desirable.

Western and Karpus have informed the Fund that each supports the Liquidation Proposal. Based on public filings made by Karpus on July 22, 2009 and by Western on September 14, 2009, Western and Karpus collectively own approximately 18.77% of the Fund’s outstanding common stock.

The Board determined to cancel the previously scheduled 2010 Annual Meeting, and schedule the Special Meeting, after Western and Karpus each indicated support for the Liquidation Proposal and a desire to proceed to a special meeting solely for the purpose of considering the Liquidation Proposal. The Fund had previously scheduled its 2010 Annual Meeting for the purpose of considering: (1) the election of directors; (2) a proposal to liquidate and dissolve the Fund; (3) a proposal from Karpus that the Fund conduct a tender offer for all of its outstanding shares; and (4) a proposal from Western recommending that the Fund’s Board be prohibited from retaining UBS Global AM and certain other entities as investment manager for the Fund. The Fund also had received notice of Western’s intent to nominate its own slate of individuals for election to the Fund’s Board at the 2010 Annual Meeting.

Each of Karpus and Western has indicated to the Fund an intention to vote in favor of the Liquidation Proposal if (i) the Special Meeting is held for the sole purpose of voting on the Liquidation Proposal—which it is and (ii) the Board unanimously recommends a vote in favor of the Liquidation Proposal—which it has. Western has indicated that in addition to these conditions, its support for the Liquidation Proposal is conditioned on the Fund’s retaining a proxy solicitor and causing the active solicitation of proxies in support of the Liquidation Proposal—which it is doing. Western indicated that if the conditions were met, Western would (in addition to voting its shares of the Fund in favor of the Liquidation Proposal) recommend to other persons with whom it has a relationship to vote their shares in favor of the Liquidation Proposal.

Finally, each of Karpus and Western has indicated that if the necessary shareholder vote on the Liquidation Proposal is not obtained and the 2010 Annual Meeting is held, each reserves the right to submit its shareholder proposal and have it considered by shareholders at that time. Western also informed the Fund that if the 2010 Annual Meeting is held, it intends to nominate its own slate of individuals for election to the Fund’s Board.

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