UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-Q QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY Investment Company Act file number: 811-06591 Morgan Stanley Quality Municipal Income 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: October 31, 2007 Date of reporting period: July 31, 2007 ITEM 1. SCHEDULE OF INVESTMENTS. The Trust's schedule of investments as of the close of the reporting period prepared pursuant to Rule 12-12 of Regulation S-X is as follows: MORGAN STANLEY QUALITY MUNICIPAL INCOME TRUST PORTFOLIO OF INVESTMENTS JULY 31, 2007 (UNAUDITED) PRINCIPAL AMOUNT IN COUPON MATURITY THOUSANDS RATE DATE VALUE --------- ------ -------- ------------- TAX-EXEMPT MUNICIPAL BONDS (175.7%) ALABAMA (1.1%) $ 3,700 University of Alabama, Ser 2004-A (MBIA Insd) 5.25% 07/01/22 $ 3,942,424 ------------- ALASKA (1.0%) 4,000 Northern Tobacco Securitization Corporation, Alaska, Asset Backed Ser 2006 A 5.00 06/01/46 3,659,480 ------------- ARIZONA (4.9%) 2,000 Arizona Transportation Board, Highway Refg Ser 2002 A 5.25 07/01/19 2,135,560 3,000 Phoenix Civic Improvement Corporation, Arizona, Airport Ser 2002 B (AMT) (FGIC Insd) 5.25 07/01/32 3,087,480 3,800 Phoenix Civic Improvement Corporation, Arizona, Jr Lien Water Ser 2002 (FGIC Insd) 5.00 07/01/26 3,914,912 6,000 Salt River Project Agricultural Improvement & Power District, Arizona, 2002 Ser B 5.00 01/01/31 6,173,340 2,000 Surprise Municipal Property Corporation, Arizona, Ser 2007 4.90 04/01/32 1,921,020 ------------- 17,232,312 ------------- CALIFORNIA (29.1%) 2,000 California Health Facilities Financing Authority, Kaiser Permanente Ser 2006 A 5.25 04/01/39 2,038,900 10,000 California Economic Recovery, Ser 2004 A 5.00 07/01/16 10,430,700 2,000 California Health Facilities Financing Authority, Cedars-Sinai Medical Center Ser 2005 5.00 11/15/34 2,014,020 5,000 California Infrastructure & Economic Development Bank, Bay Area Toll Bridges Seismic Retrofit First Lien Ser 2003 A (AMBAC Insd) 5.00 01/01/28+ 5,454,400 3,000 California Infrastructure & Economic Development Bank, The Scripps Research Institute Ser 2005 A 5.00 07/01/29 3,091,800 6,000 California Pollution Control Financing Authority, Keller Canyon Landfill Co/Browning-Ferris Industries Inc Ser 1992 (AMT) 6.875 11/01/27 6,032,220 4,000 California Statewide Communities Development 5.40 11/01/27 4,037,160 5,000 California Statewide Communities Development, John Muir Health Ser 2006 A 5.00 08/15/32 5,032,400 5,000 California, Various Purpose Dtd 05/01/03 5.25 02/01/19 5,301,450 16,000 California, Various Purpose Dtd 11/01/06 ## 4.50 10/01/36 15,094,080 6,000 Golden State Tobacco Securitization Corporation, California, Enhanced Asset Backed Ser 2005 A (AMBAC Insd) 5.00 06/01/29 6,114,060 4,000 Golden State Tobacco Securitization Corporation, California, Enhanced Asset Backed Ser 2007 A ## 5.75 06/01/47 4,125,420 8,000 Golden State Tobacco Securitization Corporation, California, Enhanced Asset Backed Ser 2007 A-1 ## 5.125 06/01/47 7,474,160 4,000 Los Angeles, California, Ser 2004 A (MBIA Insd)) 5.00 09/01/24 4,209,200 4,000 Port of Oakland, California, Ser 2002 L (AMT) (FGIC Insd)) 5.00 11/01/32 4,058,680 3,720 San Diego County Water Authority, California, Ser 2002 A COPs (MBIA Insd) 5.00 05/01/27 3,846,778 1,000 San Diego County, Burnham Institute for Medical Research Ser 2006 COPs 5.00 09/01/34 995,550 16,000 Silicon Valley Tobacco Securitization Authority Tobacco Settlement, Santa Clara Tobacco Securitization Corp Ser 2007 0.00 06/01/36 3,178,080 5,000 Tobacco Securitization Authority of Northern California, Sacramento County Tobacco Securitization Corporation Ser 2006 A-1 5.00 06/01/37 4,645,500 2,600 University of California, Ser 2007-J (FSA Insd) ## 4.50 05/15/31 2,530,437 2,400 University of California, Ser 2007-J (FSA Insd) ## 4.50 05/15/35 2,335,788 ------------- 102,040,783 ------------- COLORADO (3.5%) 2,700 Adams & Arapahoe Counties Joint School District # 32, Colorado, Ser 2003 A (FSA Insd) 5.125 12/01/21 2,844,369 1,750 Boulder County, Colorado, University Corp for Atmospheric Research Ser 2002 (MBIA Insd) 5.375 09/01/18 1,854,265 1,750 Boulder County, Colorado, University Corp for Atmospheric Research Ser 2002 (MBIA Insd) 5.375 09/01/21 1,854,265 2,000 Colorado Educational & Cultural Facilities Authority, Peak to Peak Charter School Refg & Impr Ser 2004 (XLCA Insd) 5.25 08/15/34 2,095,120 2,000 Colorado Health Facilities Authority, Adventist/Sunbelt Ser 2006 D 5.25 11/15/35 2,041,100 1,590 Denver Convention Center Hotel Authority, Colorado, Refg Ser 2006 (XLCA Insd) 5.00 12/01/30 1,646,461 ------------- 12,335,580 ------------- CONNECTICUT (1.4%) 5,000 Connecticut Housing Finance Authority 5.15 05/15/38 5,051,350 ------------- DELAWARE (0.3%) 1,000 New Castle County, Delaware, Newark Charter School Inc Ser 2006 5.00 09/01/36 960,730 ------------- DISTRICT OF COLUMBIA (1.8%) 6,000 District of Columbia Ballpark, Ser 2006 B-1 (FGIC Insd) 5.00 02/01/31 6,220,680 ------------- FLORIDA (8.2%) 3,000 Broward County School Board, Florida, Ser 2001 A COPs (FSA Insd) 5.00 07/01/26 3,064,740 3,500 Broward County, Florida, Water & Sewer Utility Ser 2003 (MBIA Insd) 5.00 10/01/24 3,630,515 3,000 Highlands County Health Facilities Authority, Florida, Adventist Health/Sunbelt Ser 2006 C 5.25 11/15/36 3,038,250 3,300 Jacksonville Electric Authority, Florida, St Johns Power Park Refg Issue 2 Ser 17 5.00 10/01/18 3,402,960 1,500 Lee County Industrial Development Authority, Florida, Shell Point Village/The Alliance Community for Retirement Living Inc, Ser 2006 5.125 11/15/36 1,449,150 2,000 Mid-Bay Bridge Authority, Florida, Refg Ser 1993 A (AMBAC Insd) 5.95 10/01/22 2,085,620 12,000 South Miami Health Facilities Authority, Florida, Baptist Health Ser 2007 ## 5.00 08/15/42 12,051,480 ------------- 28,722,715 ------------- GEORGIA (8.3%) 3,000 Atlanta, Georgia, Airport Ser 2004 J (FSA Insd) 5.00 01/01/34 3,086,910 10,000 Augusta, Georgia, Water & Sewerage Ser 2000 (FSA Insd) 5.25 10/01/30 10,402,900 6,000 Georgia State Road & Tollway Authority, Ser 2004 5.00 10/01/22 6,261,360 9,000 Georgia State Road & Tollway Authority, Ser 2004 5.00 10/01/23 9,392,040 ------------- 29,143,210 ------------- HAWAII (7.0%) 5,000 Hawaii, 1992 Ser BZ 6.00 10/01/10 5,324,200 8,000 Hawaii, 1992 Ser BZ 6.00 10/01/11 8,657,440 10,000 Honolulu City & County, Hawaii, Ser 2003 A (MBIA Insd) ## 5.25 03/01/26 10,476,850 ------------- 24,458,490 ------------- IDAHO (0.3%) 125 Idaho Housing Agency, 1992 Ser E (AMT) 6.75 07/01/12 126,621 1,015 Idaho Housing & Finance Association, 2000 Ser E (AMT) 6.00 01/01/32 1,031,392 ------------- 1,158,013 ------------- ILLINOIS (6.1%) 4,000 Chicago, Illinois, O' Hare Int'l Airport Third Lien Ser 2003 B-2 (AMT) (FSA Insd) 5.75 01/01/23 4,331,400 4,000 Cook County, Illinois, Ser 1992 C (FGIC Insd) 6.00 11/15/09 4,196,280 2,000 Illinois Educational Facilities Authority, University of Chicago Ser 1998 A 5.125 07/01/38 2,026,540 2,400 Illinois Housing Development Authority, Ser I 6.625 09/01/12 2,403,072 6,000 Illinois, First Ser 2002 (MBIA Insd) 5.375 07/01/20 6,341,400 2,000 Schaumburg, Illinois, Ser 2004 B (FGIC Insd) 5.25 12/01/34 2,106,080 ------------- 21,404,772 ------------- INDIANA (7.0%) 10,000 Indiana Bond Bank, Revolving Fund Ser 2001 A 5.00 02/01/23 10,378,900 6,000 Indiana Health & Educational Facility Financing Authority, Clarian Health Ser 2006 A 5.25 02/15/40 6,080,160 6,335 Indiana Transportation Finance Authority, Highway Ser 2000 (FGIC Insd) 5.375 12/01/10+ 6,645,288 1,400 Marion County Convention & Recreational Facilities Authority, Indiana, Refg Ser 2003 A (AMBAC Insd) 5.00 06/01/21 1,446,718 ------------- 24,551,066 ------------- KANSAS (0.8%) 3,000 University of Kansas Hospital Authority, KU Health Ser 2002 4.50 09/01/32 2,784,780 ------------- KENTUCKY (1.5%) 5,000 Louisville & Jefferson County Metropolitan Sewer District, Kentucky, Ser 1999 A (FGIC Insd) 5.75 05/15/33 5,239,400 ------------- MARYLAND (4.5%) 2,000 Baltimore County, Maryland, Oak Crest Village Ser 2007 A 5.00 01/01/37 1,968,120 2,000 Maryland Health & Higher Educational Facilities Authority, University of Maryland Medical Ser 2006 A 5.00 07/01/41 1,990,200 3,000 Maryland Health & Higher Educational Facilities Authority, King Farm Presbyterian Community 2006 Ser B 5.00 01/01/17 2,989,860 5,000 Maryland Health & Higher Educational Facilities Authority, University of Maryland Medical Ser 2001 5.25 07/01/28 5,065,900 1,500 Maryland Health & Higher Educational Facilities Authority, University of Maryland Medical Ser 2002 6.00 07/01/32 1,582,965 2,000 Northeast Maryland Waste Disposal Authority, Montgomery County Ser 2003 (AMT) (AMBAC Insd) 5.50 04/01/16 2,123,360 ------------- 15,720,405 ------------- MICHIGAN (4.1%) 6,000 Michigan Hospital Finance Authority, Henry Ford Health Refg Ser 2006 A 5.25 11/15/46 6,088,980 5,000 Michigan Strategic Fund, Detroit Edison Co Ser 2001 C (AMT) 5.65 09/01/29 5,181,150 3,000 Wayne County, Michigan, Detroit Metropolitan Wayne County Airport Refg Ser 2002 D (AMT) (FGIC Insd) 5.50 12/01/17 3,171,960 ------------- 14,442,090 ------------- MINNESOTA (0.6%) 2,000 Western Minnesota Municipal Power Agency, 2003 Ser A (MBIA Insd) 5.00 01/01/30 2,063,040 ------------- MISSOURI (1.1%) 2,250 Gravois Bluffs Transportation Development District, Montana, Sales Tax 4.75 05/01/32 2,212,200 1,500 Missouri Health & Educational Facilities Authority, Lutheran Senior Services Ser 2005 A 5.375 02/01/35 1,539,060 240 Missouri Housing Development Commission, Homeownership Ser 2000 B-1 (AMT) 6.25 03/01/31 244,346 ------------- 3,995,606 ------------- MONTANA (0.9%) 3,035 Montana Board of Housing, 2000 Ser B (AMT) 6.00 12/01/29 3,053,909 ------------- NEBRASKA (4.3%) 10,000 Nebraska Investment Financial Authority, Single Family Housing Revenue (AMT) ## 5.15 09/01/38 10,068,500 5,000 Nebraska Public Power District, Ser 2005 C (FGIC Insd) 5.00 01/01/41 5,150,400 ------------- 15,218,900 ------------- NEVADA (4.0%) 2,000 Clark County, Nevada, Airport SubLien Ser 2004 A-1 (AMT) (FGIC Insd) 5.50 07/01/20 2,128,660 1,000 Clark County, Nevada, Jet Aviation Fuel Tax Ser 2003 C (AMT) (AMBAC Insd) 5.375 07/01/19 1,048,670 1,100 Clark County, Nevada, Jet Aviation Fuel Tax Ser 2003 C (AMT) (AMBAC Insd) 5.375 07/01/20 1,152,899 2,000 Clark County, Nevada, Jet Aviation Fuel Tax Ser 2003 C (AMT) (AMBAC Insd) 5.375 07/01/22 2,092,900 5,345 Las Vegas Valley Water District, Nevada, Water Impr Refg Ser 2003 A (FGIC Insd) 5.25 06/01/20 5,627,323 2,000 Reno, Nevada, Renown Regional Medical Center Ser 2007 A 5.25 06/01/37 2,018,980 ------------- 14,069,432 ------------- NEW JERSEY (11.3%) 2,000 New Jersey Economic Development Authority, Cigarette Tax Ser 2004 5.75 06/15/29 2,131,420 1,565 New Jersey Housing Mortgage Finance Authority, Home Buyer Ser 2000 CC (AMT) (MBIA Insd) 5.875 10/01/31 1,589,054 5,000 New Jersey Transportation Trust Fund Authority, 1999 Ser A 5.75 06/15/20 5,660,350 12,000 New Jersey Turnpike Authority, Ser 2003 A (FGIC Insd)+++ 5.00 01/01/27 12,421,560 10,000 Passaic Valley Sewerage Commissioners, New Jersey, Ser F (FGIC Insd) 5.00 12/01/20 10,460,100 5,000 Tobacco Settlement Financing Corporation, New Jersey, Ser 2007-1A 4.625 06/01/26 4,493,200 6,000 Tobacco Settlement Financing Corporation, New Jersey, Ser 2007-1B 0.00 06/01/41 887,820 2,000 University of Medicine & Dentistry, New Jersey, Ser 2004 COPs (MBIA Insd) 5.25 06/15/23 2,123,520 ------------- 39,767,024 ------------- NEW MEXICO (1.7%) 3,000 Albuquerque, New Mexico, Gross Receipts Refg Ser 1999 C 5.25 07/01/17 3,075,120 3,000 Rio Rancho, New Mexico, Water & Wastewater Refg Ser 1999 (AMBAC Insd) 5.25 05/15/19 3,067,320 ------------- 6,142,440 ------------- NEW YORK (17.2%) 10,000 Metropolitan Transportation Authority, New York, Transportation Refg Ser 2002 A (FGIC Insd) 5.00 11/15/25 10,349,400 5,000 Nassau County Tobacco Settlement Corporation, New York, Asset Backed Ser A-3 5.125 06/01/46 4,906,250 3,500 New York City Municipal Water Finance Authority, New York, 2003 Ser A 5.375 06/15/19 3,708,565 18,000 New York City Municipal Water Finance Authority, New York, 2002 Ser B 5.00 06/15/26 18,450,540 10,000 New York City Municipal Water Finance Authority, New York, 2004 Ser A 5.00 06/15/35 10,257,600 2,000 Seneca Nation Indians Cap Ser A 5.00# 12/01/23 1,967,640 5,000 Tobacco Settlement Financing Corporation, New York, State Contingency Ser 2003 B-1C 5.50 06/01/17 5,252,000 5,000 Triborough Bridge & Tunnel Authority, New York, Refg 2002 E (MBIA Insd) 5.25 11/15/22 5,287,650 ------------- 60,179,645 ------------- NORTH CAROLINA (1.3%) 4,500 Charlotte, North Carolina, Water & Sewer Ser 2001 5.125 06/01/26 4,677,930 ------------- NORTH DAKOTA (0.8%) 2,750 Ward County, North Dakota, Trinity Ser 2006 5.125 07/01/29 2,757,672 ------------- OHIO (3.2%) 5,370 Cuyahoga County, Ohio, Cleveland Clinic Health Ser 2003 A 6.00 01/01/32 5,821,778 3,000 Lorain County, Ohio, Catholic Healthcare Partners Ser 2001 A 5.625 10/01/17 3,156,330 2,000 Ohio State University, General Receipts Ser 2002 A 5.125 12/01/31 2,079,700 ------------- 11,057,808 ------------- OKLAHOMA (0.4%) 1,500 Oklahoma Developmental Finance Authority Hospital Revenue 5.125 12/01/36 1,488,630 ------------- PENNSYLVANIA (4.1%) 4,000 Allegheny County Redevelopment Authority, Pennsylvania, West Penn Allegheny Health Ser 2007 A ## 5.375 11/15/40 3,931,500 10,000 Pennsylvania, First Ser 2003 RITES PA - 1112 B (MBIA Insd) ## 5.00 01/01/13+ 10,554,600 ------------- 14,486,100 ------------- SOUTH CAROLINA (4.5%) 3,000 Charleston Educational Excellence Financing Corporation, South Carolina, Charleston County School District Ser 2005 5.25 12/01/29 3,162,180 70 Lexington County Health Services 5.00 11/01/16 72,059 5,000 South Carolina Public Service Authority, Refg Ser 2002 D (FSA Insd) 5.00 01/01/20 5,193,050 7,000 South Carolina Public Service Authority, Refg Ser 2003 A (AMBAC Insd) 5.00 01/01/22 7,269,990 ------------- 15,697,279 ------------- TENNESSEE (3.0%) 2,000 Sullivan County Health Educational & Housing Facilities Board, Tennessee, Wellmont Health Ser 2006 C 5.25 09/01/36 2,010,660 8,000 Tennessee Energy Acquisition Corporation, Ser 2006 A ## 5.25 09/01/19 8,390,520 ------------- 10,401,180 ------------- TEXAS (18.1%) 2,000 Alliance Airport Authority, Texas, Federal Express Corp Refg Ser 2006 (AMT) 4.85 04/01/21 1,961,680 10,000 Austin, Texas, Water & Wastewater Refg Ser 2001 A&B (FSA Insd) ## 5.125 05/15/27 10,239,240 3,000 Brazos River Authority, Texas, TXU Electric Co Ser 1999 C (AMT) 7.70 03/01/32 3,363,750 6,000 Houston, Texas, Airport Sub Lien Ser 2000 A (AMT) (FSA Insd) 5.875 07/01/17 6,260,400 5,000 Houston, Texas, Airport Sub Lien Ser 2000 A (AMT) (FSA Insd) 5.625 07/01/30 5,170,600 15,000 Houston, Texas, Combined Utility First Lien Refg 2004 Ser A (FGIC) 5.25 05/15/23 15,911,850 2,350 Northside Independent School District, Texas, Bldg & Refg Ser 2001 (PSF) 5.00 02/15/26 2,401,888 2,000 Sabine River Authority, Texas, TXU Electric Co Refg Ser 2001 B (AMT) (Mandatory Tender 11/01/11) 5.75 05/01/30 2,031,760 13,960 San Antonio, Texas, Water & Refg Ser 2001 (FGIC Insd) 5.00 05/15/26 14,226,496 2,000 Tarrant County Cultural Educational Facilities Finance Corp, Texas, Air Force Village II Inc Ser 2007 5.125 05/15/37 1,987,740 ------------- 63,555,404 ------------- VERMONT (0.7%) 2,500 Vermont Economic Development Authority, Wake Robin Corp Ser 2006 A 5.375 05/01/36 2,502,025 ------------- VIRGINIA (1.5%) 2,000 Fairfax County Economic Development Authority, Virginia, Goodwin House Inc Ser 2007 5.125 10/01/42 1,975,120 1,450 Henrico County Economic Development Authority Residential Care Facilities, Virginia, Westminister Canterbury Management Corp 5.00 10/01/27 1,432,658 1,750 Henrico County Economic Development Authority Residential Care Facilities, Virginia, Westminister Canterbury Management Corp 5.00 10/01/35 1,694,648 ------------- 5,102,426 ------------- WASHINGTON (6.1%) 7,000 Energy Northwest, Washington, Columbia Refg Ser 2001 C (MBIA Insd) 5.75 07/01/18 7,533,540 5,000 Grant County Public Utility District #2, Washington, Electric Refg Ser 2001 H (FSA Insd) 5.375 01/01/18 5,231,350 2,000 King County, Washington, Refg 1998 Ser B (MBIA Insd) 5.25 01/01/34 2,029,100 4,010 Port of Seattle, Washington, Passenger Facility Ser 1998 A (MBIA Insd) ## 5.00 12/01/23 4,079,020 2,500 Spokane School District #81, Washington, Ser 2005 (MBIA Insd) 0.00++ 06/01/23 2,429,075 ------------- 21,302,085 ------------- TOTAL TAX-EXEMPT MUNICIPAL BONDS (Cost $603,595,541) 616,586,815 ------------- SHORT-TERM INVESTMENT (a) (2.3%) INVESTMENT COMPANY 7,924 Morgan Stanley Institutional Liquidity Tax-Exempt Portfolio - Institutional Class (Cost $7,924,485) 7,924,485 ------------- 626,254 TOTAL INVESTMENTS (Cost $611,520,026) 624,511,300 ======== ------------- (71,260) FLOATING RATE NOTE OBLIGATIONS RELATED TO SECURITIES HELD (-20.3%) Notes with interest rates ranging from 3.62% to 3.72% at July 31, 2007 and contractual maturities of collateral ranging from 01/01/13 to 06/01/47 ###(b) (Cost ($71,260,000)) (71,260,000) ------------- $554,994 TOTAL NET INVESTMENTS ======== (Cost $540,260,026) (c)(d) 157.7% 553,251,300 OTHER ACCESS IN EXCESS OF LIABILITIES 1.6 5,597,928 PREFERRED SHARES OF BENEFICIAL INTEREST (59.3) (208,038,875) ------------- NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 100.0% $ 350,810,353 ============= ---------- Note: The categories of investments are shown as a percentage of net assets applicable to common shareholders. AMT Alternative Minimum Tax. COPs Certificates of Participation. PSF Texas Permanent School Fund Guarantee Program. + Prerefunded to call date shown. ++ Security is a "Step-up" bond where the coupon increases on a predetermined future date. +++ A portion of this security has been physically segregated in connection with open futures contracts in the amount of $451,000. # Resale restricted to qualified institutional investors. ## Underlying security related to inverse floaters entered into by the Trust. ### Floating rate note obligation related to securities held. The interest rates shown reflect the rates in effect at July 31, 2007. (a) The Trust invests in Morgan Stanley Institutional Liquidity Tax-Exempt Portfolio - Institutional Class, an open-end management investment company managed by the Investment Adviser. Investment Advisory fees paid by the Trust are reduced by an amount equal to the advisory and administrative service fees paid by Morgan Stanley Institutional Liquidity Tax-Exempt Portfolio - Institutional Class with respect to assets invested by the Trust in Morgan Stanley Institutional Liquidity Tax-Exempt Portfolio - Institutional Class. Income distributions earned by the trust totaled $38,908 for the period ended July 31, 2007. (b) Floating Rate Note Obligations Related to Securities Held - The Trust enters into transactions in which it transfers to Dealer Trusts ("Dealer Trusts"), fixed rate bonds in exchange for cash and residual interests in the Dealer Trusts' assets and cash flows, which are in the form of inverse floating rate investments. The Dealer Trusts fund the purchases of the fixed rate bonds by issuing floating rate notes to third parties and allowing the Trust to retain residual interest in the bonds. The Trust enters into shortfall agreements with the Dealer Trusts which commit the Trust to pay the Dealer Trusts, in certain circumstances, the difference between the liquidation value of the fixed rate bonds held by the Dealer Trusts and the liquidation value of the floating rate notes held by third parties, as well as any shortfalls in interest cash flows. The residual interests held by the Trust (inverse floating rate investments) include the right of the Trust (1) to cause the holders of the floating rate notes to tender their notes at par at the next interest rate reset date, and (2) to transfer the municipal bond from the Dealer Trusts to the Trust, thereby collapsing the Dealer Trusts. The Trust accounts for the transfer of bonds to the Dealer Trusts as secured borrowings, with the securities transferred remaining in the Trust's investment assets, and the related floating rate notes reflected as Trust liabilities. The notes issued by the Dealer Trusts have interest rates that reset weekly and the floating rate note holders have the option to tender their notes to the Dealer Trusts for redemption at par at each reset date. At July 31, 2007, Trust investments with a value of $101,351,595 are held by the Dealer Trusts and serve as collateral for the $71,260,000 in floating rate note obligations outstanding at that date. Contractual maturities of the floating rate note obligations and interest rates in effect at July 31, 2007 are presented in the "Portfolio of Investments". (c) Securities have been designated as collateral in an amount equal to $47,121,788 in connection with open futures contracts and an open swap contract. (d) The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $17,018,471 and the aggregate gross unrealized depreciation is $4,027,197, resulting in net unrealized appreciation of $12,991,274. Bond Insurance: --------------- AMBAC AMBAC Assurance Corporation. FGIC Financial Guaranty Insurance Company. FSA Financial Security Assurance Inc. MBIA Municipal Bond Investors Assurance Corporation. XLCA XL Capital Assurance Inc. FUTURES CONTRACTS OPEN AT JULY 31, 2007: NUMBER OF DESCRIPTION, DELIVERY UNDERLYING FACE UNREALIZED CONTRACTS LONG/SHORT MONTH AND YEAR AMOUNT AT VALUE DEPRECIATION --------- ---------- -------------- --------------- ------------ 220 Short U.S. Treasury Notes 10 Year, September 2007 $(23,632,814) $(77,950) 220 Short U.S. Treasury Bond 20 Year, September 2007 (24,213,750) (378,730) --------- Total Unrealized Depreciation $(456,680) ========= INTEREST RATE SWAP CONTRACT OPEN AT JULY 31, 2007: NOTIONAL PAYMENTS MADE PAYMENTS RECEIVED TERMINATION UNREALIZED COUNTERPARTY AMOUNT (000) BY TRUST BY TRUST DATE APPRECIATION ------------------------------------------------------------------------------------------------------------- JPMorgan Chase & Co. $20,000 Fixed Rate 3.79% Floating Rate 3.85% August 24, 2017 $181,694 ======== ITEM 2. CONTROLS AND PROCEDURES. (a) The Trust's principal executive officer and principal financial officer have concluded that the Trust's disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Trust in this Form N-Q was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, based upon such officers' evaluation of these controls and procedures as of a date within 90 days of the filing date of the report. (b) There were no changes in the Trust's internal control over financial reporting that occurred during the registrant's fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Trust's internal control over financial reporting. ITEM 3. EXHIBITS. (a) A separate certification for each principal executive officer and principal financial officer of the registrant are attached hereto. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Morgan Stanley Quality Municipal Income Trust /s/ Ronald E. Robison ------------------------------------ Ronald E. Robison Principal Executive Officer September 20, 2007 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 September 20, 2007 /s/ Francis Smith ------------------------------------ Francis Smith Principal Financial Officer September 20, 2007 3 EXHIBIT 3 A1 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER I, Ronald E. Robison, certify that: 1. I have reviewed this report on Form N-Q of Morgan Stanley Quality Municipal Income Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Omitted; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: September 20, 2007 /s/ Ronald E. Robison ---------------------------------------- Ronald E. Robison Principal Executive Officer 4 EXHIBIT 3 A2 CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER I, Francis Smith, certify that: 1. I have reviewed this report on Form N-Q of Morgan Stanley Quality Municipal Income Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Omitted; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: September 20, 2007 /s/ Francis Smith ---------------------------------------- Francis Smith Principal Financial Officer 5