Investment Company Act file number

811-07694

MORGAN STANLEY EMERGING MARKETS DEBT FUND, INC.

(Exact name of registrant as specified in charter)

522 FIFTH AVENUE, NEW YORK, NY

10036

(Address of principal executive offices)

(Zip code)

RONALD E. ROBISON
522 FIFTH AVENUE, NEW YORK, NY 10036

(Name and address of agent for service)

Registrant’s telephone number, including area code:

1-800-231-2608

Date of fiscal year end:

12/31

Date of reporting period:

9/30/07

Face
Amount
(000)

Value
(000)

DEBT INSTRUMENTS (98.9%)

Argentina (3.8%)

Sovereign (3.8%)

Republic of Argentina,

0.62%, 12/15/35

$

(a)(b)1,109

$

143

0.65%, 12/15/35

ARS

(a)37,715

1,169

5.83%, 12/31/33

(a)8,149

3,137

8.28%, 12/31/33

$

(b)3,890

3,505

Republic of Argentina (Linked Variable Rate),

233.70%, 4/10/49

(c)3,770

1,786

9,740

Brazil (17.9%)

Corporate (1.8%)

Banco ABN Amro Real S.A.,

15.86%, 12/13/07

BRL

3,900

2,138

16.20%, 2/22/10

4,240

2,530

4,668

Sovereign (16.1%)

Federative Republic of Brazil,

8.00%, 1/15/18

$

5,544

6,201

8.88%, 10/14/19 - 4/15/24

7,688

9,620

10.50%, 7/14/14

1,740

2,205

11.00%, 8/17/40

4,250

5,690

14.50%, 10/15/09

6,040

7,176

Nota do Tesouro Nacional,

6.00%, 5/18/09

BRL

2,000

2,639

10.00%, 1/1/12

13,350

7,131

40,662

45,330

Bulgaria (1.5%)

Sovereign (1.5%)

Republic of Bulgaria,

8.25%, 1/15/15

$

1,699

1,984

Republic of Bulgaria (Registered),

8.25%, 1/15/15

1,490

1,739

3,723

Chile (1.3%)

Corporate(1.3%)

Empresa Nacional de Petroleo,

6.75%, 11/15/12

(d)3,090

3,250

Colombia (2.3%)

Sovereign (2.3%)

Republic of Colombia,

7.38%, 9/18/37

2,870

3,164

8.25%, 12/22/14

1,040

1,175

11.75%, 2/25/20

1,075

1,581

5,920

Ecuador (1.1%)

Sovereign (1.1%)

Republic of Ecuador (Registered),

9.38%, 12/15/15

470

460

10.00%, 8/15/30

(e)2,500

2,256

2,716

Egypt (0.8%)

Sovereign (0.8%)

Arab Republic of Egypt,

8.75%, 7/18/12

EGP

10,510

1,928

Indonesia (3.5%)

Corporate (3.5%)

Pindo Deli Finance Mauritius,

Tranche A, 6.00%, 4/28/15

$

(a)(d)1,246

1,059

Tranche B, 6.00%, 4/28/18

(a)(d)3,413

1,707

Tranche C, Zero Coupon, 4/28/27

(a)(d)6,884

792

Tijiwi Kimia Finance Mauritius Ltd.,

Tranche A, 6.00%, 4/28/15

(a)(d)1,773

1,507

Tranche A, 6.00%, 4/28/15

(a)2,325

1,976

Tranche B, 6.00%, 4/28/18

(a)(d)2,954

1,477

Tranche C, Zero Coupon, 4/28/27

(a)(d)3,352

385

8,903

Ivory Coast (0.3%)

Sovereign (0.3%)

Ivory Coast,

2.50%, 3/31/18

(c)2,045

705

Malaysia (1.0%)

Sovereign (1.0%)

Government of Malaysia,

7.50%, 7/15/11

420

456

8.75%, 6/1/09

1,929

2,043

2,499

Mexico (17.7%)

Corporate (7.1%)

Pemex Project Funding Master Trust,

6.63%, 6/15/35

5,000

5,178

6.66%, 6/15/10

(a)(d)4,250

4,335

8.63%, 12/1/23

1,740

2,156

9.13%, 10/13/10

4,040

4,476

9.50%, 9/15/27

1,320

1,797

17,942

Sovereign (10.6%)

Mexican Bonos,

8.00%, 12/17/15

MXN

54,910

5,048

9.50%, 12/18/14

111,250

11,101

United Mexican States,

6.75%, 9/27/34

$

(f)3,679

4,010

7.50%, 1/14/12

1,700

1,862

8.38%, 1/14/11

4,400

4,862

26,883

44,825

Panama (2.5%)

Sovereign (2.5%)

Republic of Panama,

7.13%, 1/29/26

1,910

2,072

7.25%, 3/15/15

700

753

9.38%, 4/1/29

1,890

2,542

9.63%, 2/8/11

906

1,016

6,383

Peru (2.9%)

Sovereign (2.9%)

Republic of Peru,

8.38%, 5/3/16

1,150

1,354

8.75%, 11/21/33

3,130

4,127

9.88%, 2/6/15

1,385

1,739

7,220

Philippines (10.4%)

Sovereign (10.4%)

Republic of Philippines,

8.88%, 3/17/15

(f)9,480

11,021

9.00%, 2/15/13

(f)2,240

2,565

9.50%, 2/2/30

9,783

12,791

26,377

Qatar (0.7%)

Sovereign (0.7%)

State of Qatar (Registered),

9.75%, 6/15/30

1,260

1,862

Russia (13.1%)

Corporate (6.1%)

Gaz Capital for Gazprom,

6.21%, 11/22/16

(d)3,282

3,261

8.63%, 4/28/34

3,670

4,671

JPMorgan Chase & Co.,

7.00%, 6/28/17

RUB

62,000

2,333

RSHB Capital S.A. for OJSC Russian Agricultural Bank,

6.30%, 5/15/17

$

(d)2,004

1,892

7.18%, 5/16/13

(d)2,800

2,859

7.18%, 5/16/13

270

276

15,292

Sovereign (7.0%)

Russian Federation,

7.50%, 3/31/30

(d)(e)3,367

3,771

Russian Federation (Registered),

7.50%, 3/31/30

(e)2,488

2,786

11.00%, 7/24/18

2,901

4,087

12.75%, 6/24/28

4,000

7,140

17,784

33,076

Trinidad (0.9%)

Corporate (0.9%)

National Gas of Trinidad & Tobago Ltd.,

6.05%, 1/15/36

(d)2,369

2,256

Turkey (7.8%)

Sovereign (7.8%)

Republic of Turkey,

6.75%, 4/3/18

4,880

4,844

7.00%, 9/26/16

2,920

2,989

11.00%, 1/14/13

7,145

8,681

11.50%, 1/23/12

320

386

11.88%, 1/15/30

1,737

2,705

19,605

Ukraine (1.0%)

Sovereign (1.0%)

Republic of Ukraine,

6.58%, 11/21/16

2,410

2,440

Venezuela (8.4%)

Sovereign (8.4%)

Republic of Venezuela,

9.25%, 9/15/27

11,581

12,015

10.75%, 9/19/13

8,330

9,226

21,241

TOTAL DEBT INSTRUMENTS (Cost $237,541)

249,999

No. of

Warrants

WARRANTS (0.5%)

Mexico (0.0%)

United Mexican States, expiring 10/11/07

(g)3,830

11

United Mexican States, expiring 11/07/07

(g)3,830

4

15

Nigeria (0.3%)

Central Bank of Nigeria, expiring 11/15/20

(g)(b)3,000

765

Venezuela (0.2%)

Republic of Venezuela Oil-Linked Payment Obligation,

expiring 4/15/20

(a)(b)11,350

425

TOTAL WARRANTS (Cost $233)

1,205

Shares

SHORT-TERM INVESTMENT (0.6%)

Investment Company (0.6%)
Morgan Stanley Institutional Liquidity
Money Market Portfolio
— Institutional Class (Cost $1,468)

(h)1,467,715

1,468

TOTAL INVESTMENTS + (102.2%) (Cost $239,242)

252,672

LIABILITIES IN EXCESS OF OTHER ASSETS

(5,426

)

NET ASSETS

$

247,246

(a)

Variable/Floating Rate Security — Interest rate changes on these instruments are based on changes in a designated base rate. The rates shown are those in effect on September 30, 2007.

(b)

Securities were valued at fair value — At September 30, 2007, the Portfolio held fair valued securities, valued at $4,838,000, representing 2.0% of net assets.

(c)

Issuer is in default.

(d)

144A Security — Certain conditions for public sale may exist. Unless otherwise noted, these securities are deemed to be liquid.

(e)

Step Bond — Coupon rate increases in increments to maturity. Rate disclosed is as of September 30, 2007. Maturity date disclosed is the ultimate maturity.

(f)

Denotes all or a portion of securities subject to repurchase under the Reverse Repurchase Agreement as of September 30, 2007.

(g)

Non-income producing security.

(h)

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Money Market Portfolio (the “Liquidity Fund”), an open-end management investment company managed by the Adviser. Investment Advisory fees paid by the Fund are reduced by an amount equal to its

pro-rata share of the advisory and administration fees paid by the Liquidity Fund. For the nine months ended September 30, 2007, advisory fees paid were reduced by $2,000 relating to the Portfolio’s investment in the Liquidity Fund. For the same period, income distributions earned by the Fund are recorded as interest from affiliates and totaled $103,000. During the nine months ended September 30, 2007, cost of purchases and sales in the Liquidity Fund were $68,999,000 and $67,531,000, respectively.

ARS

Argentinian Peso

BRL

Brazilian Real

EGP

Egyptian Pound

MXN

Mexican Peso

RUB

Russian Ruble

+

At September 30, 2007, the U.S. Federal income tax cost basis of investments was approximately $239,242,000 and, accordingly, net unrealized appreciation for U.S. Federal income tax purposes was $13,430,000 of which $18,477,000 related to appreciated securities and $5,047,000 related to depreciated securities.

Maturity in

less than

Lehman Brothers Agreement

365 Days

Value of Securities Subject to Repurchase

$

7,787,550

Liability Under Reverse Repurchase

Agreement

$

7,818,998

Weighted Average Days to Maturity

44.66

(Registrant)

Morgan Stanley Emerging Markets Debt Fund, Inc.

By:

/s/ Ronald E. Robison

Name:

Ronald E. Robison

Title:

Principal Executive Officer

Date:

November 20, 2007

By:

/s/ Ronald E. Robison

Name:

Ronald E. Robison

Title:

Principal Executive Officer

Date:

November 20, 2007

By:

/s/ James Garrett

Name:

James Garrett

Title:

Principal Financial Officer

Date:

November 20, 2007