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		811-7920

Western Asset High Income Opportunity Fund Inc.
(Exact name of registrant as specified in charter)

55 Water Street, New York, NY			10041
(Address of principal executive offices)			(Zip code)

Robert I. Frenkel, Esq. Legg Mason & Co., LLC 100 First Stamford Place Stamford, CT 06902
(Name and address of agent for service)

Registrant’s telephone number, including area code:		1-888-777-0102

Date of fiscal year end:	September 30

Date of reporting period:	December 31, 2009

ITEM 1. SCHEDULE OF INVESTMENTS

WESTERN ASSET

HIGH INCOME OPPORTUNITY FUND INC.

FORM N-Q

DECEMBER 31, 2009

Western Asset High Income Opportunity Fund Inc.

Schedule of Investments (unaudited)

December 31, 2009

Face Amount		Security	Value
CORPORATE BONDS & NOTES — 89.3%
CONSUMER DISCRETIONARY — 17.8%
Auto Components — 0.9%
$	390,000	Affinia Group Inc., Senior Secured Notes, 10.750% due 8/15/16 (a)	$	424,612
		Allison Transmission Inc., Senior Notes:
290,000		11.000% due 11/1/15 (a)	305,950
1,817,200		11.250% due 11/1/15 (a)(b)	1,908,060
170,000		American Axle & Manufacturing Holdings Inc., Senior Secured Notes, 9.250% due 1/15/17 (a)	173,400
660,000		Keystone Automotive Operations Inc., Senior Subordinated Notes, 9.750% due 11/1/13	287,100
435,000		TRW Automotive Inc., Senior Notes, 8.875% due 12/1/17 (a)	454,575
		Visteon Corp., Senior Notes:
532,000		8.250% due 8/1/10 (c)	142,310
1,087,000		12.250% due 12/31/16 (a)(c)	461,975
		Total Auto Components	4,157,982
Automobiles — 0.6%
		Motors Liquidation Co.:
4,220,000		Senior Debentures, 8.375% due 7/15/33 (c)	1,160,500
		Senior Notes:
2,665,000		7.200% due 1/15/11 (c)	732,875
2,125,000		7.125% due 7/15/13 (c)	573,750
		Total Automobiles	2,467,125
Diversified Consumer Services — 0.4%
1,550,000		Stonemor Operating LLC/Cornerstone Family Services/Osiris Holdings, Senior Notes, 10.250% due 12/1/17 (a)	1,584,875
Hotels, Restaurants & Leisure — 6.7%
1,345,000		Ameristar Casinos Inc., Senior Notes, 9.250% due 6/1/14 (a)	1,402,162
675,000		Boyd Gaming Corp., Senior Subordinated Notes, 7.125% due 2/1/16	590,625
78,000		Denny’s Holdings Inc., Senior Notes, 10.000% due 10/1/12	80,145
1,695,000		Downstream Development Quapaw, Senior Notes, 12.000% due 10/15/15 (a)	1,404,731
		El Pollo Loco Inc.:
2,915,000		Senior Notes, 11.750% due 11/15/13	2,667,225
725,000		Senior Secured Notes, 11.750% due 12/1/12 (a)	755,813
445,000		Fontainebleau Las Vegas Holdings LLC/Fontainebleau Las Vegas Capital Corp., 10.250% due 6/15/15 (a)(c)	6,675
		Harrah’s Operating Co. Inc.:
2,750,000		Senior Notes, 10.750% due 2/1/16	2,255,000
		Senior Secured Notes:
725,000		10.000% due 12/15/15 (a)	594,500
1,420,000		11.250% due 6/1/17 (a)	1,492,775
2,200,000		Harrah’s Operating Escrow LLC/Harrahs Escrow Corp., Senior Secured Notes, 11.250% due 6/1/17 (a)	2,312,750
1,640,000		Indianapolis Downs LLC & Capital Corp., Senior Secured Notes, 11.000% due 11/1/12 (a)	1,074,200
3,912,000		Inn of the Mountain Gods Resort & Casino, Senior Notes, 12.000% due 11/15/10 (c)(d)	1,638,150
960,000		Landry’s Restaurants Inc., Senior Secured Notes, 11.625% due 12/1/15 (a)	1,022,400
		MGM MIRAGE Inc.:
		Senior Notes:
95,000		8.500% due 9/15/10	95,000
1,915,000		11.375% due 3/1/18 (a)	1,723,500
		Senior Secured Notes:
150,000		10.375% due 5/15/14 (a)	163,500
360,000		11.125% due 11/15/17 (a)	400,500
3,090,000		Senior Subordinated Notes, 8.375% due 2/1/11	2,943,225

See Notes to Schedule of Investments.

Western Asset High Income Opportunity Fund Inc.

Schedule of Investments (unaudited) (continued)

December 31, 2009

Face Amount		Security	Value
Hotels, Restaurants & Leisure — 6.7% (continued)
		Mohegan Tribal Gaming Authority:
$	1,300,000	Senior Secured Notes, 11.500% due 11/1/17 (a)	$	1,332,500
225,000		Senior Subordinated Notes, 6.875% due 2/15/15	147,375
1,440,000		NCL Corp. Ltd., Senior Secured Notes, 11.750% due 11/15/16 (a)	1,429,200
430,000		Penn National Gaming Inc., Senior Subordinated Notes, 8.750% due 8/15/19 (a)	441,825
1,295,000		Pinnacle Entertainment Inc., Senior Notes, 8.625% due 8/1/17 (a)	1,327,375
1,065,000		Sbarro Inc., Senior Notes, 10.375% due 2/1/15	841,350
		Snoqualmie Entertainment Authority, Senior Secured Notes:
890,000		4.680% due 2/1/14 (a)(e)	440,550
165,000		9.125% due 2/1/15 (a)	88,275
		Station Casinos Inc.:
		Senior Notes:
1,515,000		6.000% due 4/1/12 (c)(d)	236,719
2,265,000		7.750% due 8/15/16 (c)(d)	365,231
85,000		Senior Subordinated Notes, 6.625% due 3/15/18 (c)(d)	850
405,000		Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp., Secured Notes, 7.875% due 11/1/17 (a)	412,088
		Total Hotels, Restaurants & Leisure	29,686,214
Household Durables — 0.8%
		American Greetings Corp., Senior Notes:
865,000		7.375% due 6/1/16	847,700
55,000		7.375% due 6/1/16	50,600
1,790,000		Norcraft Cos. LP/Norcraft Finance Corp., Senior Subordinated Notes, 9.000% due 11/1/11 (d)	1,792,237
1,023,000		Norcraft Holdings LP/Norcraft Capital Corp., Senior Discount Notes, 9.750% due 9/1/12 (d)	987,195
		Total Household Durables	3,677,732
Media — 5.5%
		Affinion Group Inc.:
565,000		Senior Notes, 10.125% due 10/15/13	583,363
		Senior Subordinated Notes:
1,150,000		10.125% due 10/15/13	1,187,375
4,200,000		11.500% due 10/15/15	4,420,500
551,225		CCH II LLC/CCH II Capital Corp., Senior Notes, 13.500% due 11/30/16 (a)	646,311
		Cengage Learning Acquisitions Inc.:
450,000		Senior Notes, 10.500% due 1/15/15 (a)	432,563
1,380,000		Senior Subordinated Notes, 13.250% due 7/15/15 (a)	1,347,225
3,140,000		Charter Communications Inc., Senior Secured Notes, 10.875% due 9/15/14 (a)	3,532,500
1,500,000		CSC Holdings Inc., Senior Notes, 8.500% due 6/15/15 (a)	1,605,000
3,910,000		DISH DBS Corp., Senior Notes, 7.875% due 9/1/19	4,120,162
1,915,000		R.H. Donnelley Corp., Senior Notes, 8.875% due 1/15/16 (c)	189,106
1,250,000		Sinclair Broadcast Group Inc., Senior Subordinated Notes, 8.000% due 3/15/12	1,225,000
1,060,000		Sun Media Corp., Senior Notes, 7.625% due 2/15/13	971,225
1,975,000		Univision Communications Inc., Senior Secured Notes, 12.000% due 7/1/14 (a)	2,184,844
675,000		UPC Holding BV, Senior Notes, 9.875% due 4/15/18 (a)	715,500
		Virgin Media Finance PLC:
500,000		Senior Bonds, 9.500% due 8/15/16	539,375
537,000		Senior Notes, 9.125% due 8/15/16	568,549
		Total Media	24,268,598
Multiline Retail — 0.8%
158,000		Dollar General Corp., Senior Notes, 10.625% due 7/15/15	175,775

See Notes to Schedule of Investments.

Western Asset High Income Opportunity Fund Inc.

Schedule of Investments (unaudited) (continued)

December 31, 2009

Face Amount		Security	Value
Multiline Retail — 0.8% (continued)
		Neiman Marcus Group Inc.:
$	2,329,028	Senior Notes, 9.000% due 10/15/15 (b)	$	2,288,270
1,090,000		Senior Secured Notes, 7.125% due 6/1/28	964,650
		Total Multiline Retail	3,428,695
Specialty Retail — 1.5%
1,495,000		Blockbuster Inc., Senior Secured Notes, 11.750% due 10/1/14 (a)	1,427,725
365,000		Eye Care Centers of America, Senior Subordinated Notes, 10.750% due 2/15/15	375,037
155,000		Limited Brands Inc., Senior Notes, 8.500% due 6/15/19 (a)	169,338
		Michaels Stores Inc.:
2,575,000		Senior Notes, 10.000% due 11/1/14	2,678,000
610,000		Senior Subordinated Bonds, 11.375% due 11/1/16	645,075
1,640,000		Senior Subordinated Notes, step bond to yield 3.070% due 11/1/16	1,361,200
		Total Specialty Retail	6,656,375
Textiles, Apparel & Luxury Goods — 0.6%
2,340,000		Oxford Industries Inc., Senior Secured Notes, 11.375% due 7/15/15	2,585,700
		TOTAL CONSUMER DISCRETIONARY	78,513,296
CONSUMER STAPLES — 1.5%
Food Products — 0.6%
560,000		Bumble Bee Foods LLC, Senior Secured Notes, 7.750% due 12/15/15 (a)	562,800
880,000		Del Monte Corp., Senior Subordinated Notes, 7.500% due 10/15/19 (a)	910,800
700,000		Dole Food Co. Inc., Senior Secured Notes, 8.000% due 10/1/16 (a)	714,000
605,000		Smithfield Foods Inc., Senior Secured Notes, 10.000% due 7/15/14 (a)	659,450
		Total Food Products	2,847,050
Household Products — 0.4%
670,000		American Achievement Corp., Senior Subordinated Notes, 8.250% due 4/1/12 (a)	671,675
950,000		Reynolds Group DL Escrow Inc./Reynolds Group Escrow LLC, Senior Secured Notes, 7.750% due 10/15/16 (a)	976,125
		Total Household Products	1,647,800
Personal Products — 0.2%
760,000		Revlon Consumer Products Corp., Senior Secured Notes, 9.750% due 11/15/15 (a)	788,500
Tobacco — 0.3%
		Alliance One International Inc., Senior Notes:
830,000		10.000% due 7/15/16 (a)	875,650
660,000		10.000% due 7/15/16 (a)	696,300
		Total Tobacco	1,571,950
		TOTAL CONSUMER STAPLES	6,855,300
ENERGY — 12.3%
Energy Equipment & Services — 1.5%
1,505,000		Basic Energy Services Inc., Senior Secured Notes, 11.625% due 8/1/14	1,617,875
1,150,000		Complete Production Services Inc., Senior Notes, 8.000% due 12/15/16	1,139,938
610,000		Geokinetics Holdings Inc., Senior Secured Notes, 9.750% due 12/15/14 (a)	602,375
895,000		Hercules Offshore LLC, Senior Secured Notes, 10.500% due 10/15/17 (a)	948,700
1,475,000		Key Energy Services Inc., Senior Notes, 8.375% due 12/1/14	1,486,063
550,000		North American Energy Alliance LLC/North American Energy Alliance Finance Corp., Senior Secured Notes, 10.875% due 6/1/16 (a)	587,125
60,000		Southern Natural Gas Co., Senior Notes, 8.000% due 3/1/32	69,298
		Total Energy Equipment & Services	6,451,374

See Notes to Schedule of Investments.

Western Asset High Income Opportunity Fund Inc.

Schedule of Investments (unaudited) (continued)

December 31, 2009

Face Amount		Security	Value
Oil, Gas & Consumable Fuels — 10.8%
$	400,000	Adaro Indonesia PT, Notes, 7.625% due 10/22/19 (a)	$	397,500
1,230,000		Arch Coal Inc., Senior Notes, 8.750% due 8/1/16 (a)	1,306,875
1,730,000		Atlas Pipeline Partners LP, Senior Notes, 8.750% due 6/15/18	1,539,700
4,172,000		Belden & Blake Corp., Secured Notes, 8.750% due 7/15/12	3,921,680
1,155,000		Berry Petroleum Co., Senior Notes, 10.250% due 6/1/14	1,261,837
		Chesapeake Energy Corp., Senior Notes:
2,285,000		6.625% due 1/15/16	2,273,575
1,180,000		6.250% due 1/15/18	1,138,700
585,000		7.250% due 12/15/18	592,313
360,000		Compagnie Generale de Geophysique SA, Senior Notes, 7.500% due 5/15/15	359,100
810,000		Compagnie Generale de Geophysique-Veritas, Senior Notes, 9.500% due 5/15/16 (a)	870,750
3,479,221		Corral Petroleum Holdings AB, Senior Secured Subordinated Bonds, 1.784% due 4/15/10 (a)(b)(e)(f)	2,835,565
345,000		Encore Acquisition Co., Senior Subordinated Notes, 9.500% due 5/1/16	365,700
		Enterprise Products Operating LLP:
1,380,000		Junior Subordinated Notes, 8.375% due 8/1/66	1,347,166
620,000		Subordinated Notes, 7.034% due 1/15/68	569,696
1,110,000		Forest Oil Corp., Senior Notes, 8.500% due 2/15/14 (a)	1,165,500
70,000		Griffin Coal Mining Co. Pty Ltd., Senior Notes, 9.500% due 12/1/16 (a)(c)	41,738
2,815,000		International Coal Group Inc., Senior Notes, 10.250% due 7/15/14	2,719,994
		Mariner Energy Inc., Senior Notes:
940,000		7.500% due 4/15/13	940,000
555,000		8.000% due 5/15/17	535,575
480,000		MarkWest Energy Partners LP/MarkWest Energy Finance Corp., Senior Notes, 8.750% due 4/15/18	496,800
1,720,000		Murray Energy Corp., Senior Secured Notes, 10.250% due 10/15/15 (a)	1,720,000
		OPTI Canada Inc., Senior Secured Notes:
1,000,000		9.000% due 12/15/12 (a)	1,027,500
345,000		7.875% due 12/15/14	284,625
920,000		8.250% due 12/15/14	762,450
1,495,000		Petrohawk Energy Corp., Senior Notes, 9.125% due 7/15/13	1,569,750
		Petroplus Finance Ltd., Senior Notes:
630,000		6.750% due 5/1/14 (a)	595,350
780,000		7.000% due 5/1/17 (a)	705,900
		Plains Exploration & Production Co., Senior Notes:
1,125,000		10.000% due 3/1/16	1,237,500
1,195,000		8.625% due 10/15/19	1,233,837
		Quicksilver Resources Inc., Senior Notes:
1,200,000		8.250% due 8/1/15	1,236,000
455,000		11.750% due 1/1/16	518,700
4,200,000		SandRidge Energy Inc., Senior Notes, 8.625% due 4/1/15 (b)	4,221,000
1,575,000		Teekay Corp., Senior Notes, 8.875% due 7/15/11	1,639,969
3,270,000		Tennessee Gas Pipeline Co., Senior Notes, 8.375% due 6/15/32	3,899,733
1,325,000		W&T Offshore Inc., Senior Notes, 8.250% due 6/15/14 (a)	1,265,375
1,275,000		Whiting Petroleum Corp., Senior Subordinated Notes, 7.000% due 2/1/14	1,286,156
		Total Oil, Gas & Consumable Fuels	47,883,609
		TOTAL ENERGY	54,334,983
FINANCIALS — 13.8%
Capital Markets — 0.1%
1,420,000		Lehman Brothers Holdings Inc., Medium-Term Notes, Senior Notes, 5.250% due 2/6/12 (c)	284,000

See Notes to Schedule of Investments.

Western Asset High Income Opportunity Fund Inc.

Schedule of Investments (unaudited) (continued)

December 31, 2009

Face Amount		Security	Value
Commercial Banks — 1.5%
$	830,000	BAC Capital Trust VI, Capital Securities, Junior Subordinated Notes, 5.625% due 3/8/35	$	666,446
600,000		BankAmerica Institutional Capital B, Junior Subordinated Bonds, 7.700% due 12/31/26 (a)	570,000
700,000		Credit Agricole SA, Subordinated Notes, 8.375% due 10/13/19 (a)(g)	744,352
		Royal Bank of Scotland Group PLC, Subordinated Notes:
765,000		5.000% due 11/12/13	687,618
330,000		5.050% due 1/8/15	286,568
3,090,000		Wells Fargo Capital XIII, Medium-Term Notes, 7.700% due 3/26/13 (e)(g)	3,012,750
605,000		Wells Fargo Capital XV, Junior Subordinated Notes, 9.750% due 9/26/13 (e)(g)	650,375
		Total Commercial Banks	6,618,109
Consumer Finance — 5.0%
2,440,000		FMG Finance Pty Ltd., Senior Secured Notes, 10.625% due 9/1/16 (a)	2,711,450
1,000,000		Ford Motor Credit Co., Senior Notes, 9.875% due 8/10/11	1,047,406
		Ford Motor Credit Co., LLC, Senior Notes:
2,045,000		7.500% due 8/1/12	2,063,485
8,165,000		12.000% due 5/15/15	9,477,932
		GMAC LLC:
5,304,000		Senior Notes, 8.000% due 11/1/31 (a)	4,826,640
74,000		Subordinated Notes, 8.000% due 12/31/18 (a)	65,860
		SLM Corp.:
905,000		Medium-Term Notes, 5.625% due 8/1/33	684,268
1,465,000		Senior Notes, 8.450% due 6/15/18	1,447,738
		Total Consumer Finance	22,324,779
Diversified Financial Services — 4.4%
1,120,000		Capital One Capital V, Junior Subordinated Notes, Cumulative Trust Preferred Securities, 10.250% due 8/15/39	1,305,377
2,255,000		CCM Merger Inc., Notes, 8.000% due 8/1/13 (a)	1,840,644
		CIT Group Inc., Senior Secured Bonds:
212,281		7.000% due 5/1/13	199,544
318,421		7.000% due 5/1/14	296,530
318,421		7.000% due 5/1/15	286,579
630,702		7.000% due 5/1/16	558,171
2,812,982		7.000% due 5/1/17	2,454,327
1,250,000		Fresenius U.S. Finance II Inc., Senior Notes, 9.000% due 7/15/15 (a)	1,381,250
195,000		International Lease Finance Corp., Medium-Term Notes, Senior Notes, 5.750% due 6/15/11	179,225
2,040,000		JPMorgan Chase & Co., Junior Subordinated Notes, 7.900% due 4/30/18 (e)(g)	2,111,061
		Leucadia National Corp., Senior Notes:
450,000		7.750% due 8/15/13	453,937
1,220,000		8.125% due 9/15/15	1,250,500
		TNK-BP Finance SA:
1,525,000		7.875% due 3/13/18 (a)	1,578,375
744,000		Senior Notes, 7.875% due 3/13/18 (a)	768,180
1,200,000		UPC Germany GmbH, Senior Secured Bonds, 8.125% due 12/1/17 (a)	1,219,500
2,850,000		Vanguard Health Holdings Co., I LLC, Senior Discount Notes, 11.250% due 10/1/15	3,013,875
580,000		Vanguard Health Holdings Co., II LLC, Senior Subordinated Notes, 9.000% due 10/1/14	603,925
		Total Diversified Financial Services	19,501,000

See Notes to Schedule of Investments.

Western Asset High Income Opportunity Fund Inc.

Schedule of Investments (unaudited) (continued)

December 31, 2009

Face Amount		Security	Value
Insurance — 1.4%
		American International Group Inc.:
$	860,000	Junior Subordinated Notes, 8.175% due 5/15/58 (e)	$	574,050
		Medium-Term Notes, Senior Notes:
2,335,000		5.450% due 5/18/17	1,892,445
615,000		5.850% due 1/16/18	505,390
		Senior Notes:
520,000		5.050% due 10/1/15	434,330
1,465,000		8.250% due 8/15/18	1,377,471
1,160,000		Everest Reinsurance Holdings Inc., Subordinated Notes, 6.600% due 5/15/37	864,200
590,000		MetLife Capital Trust IV, Junior Subordinated Notes, 7.875% due 12/15/37 (a)	592,950
		Total Insurance	6,240,836
Real Estate Investment Trusts (REITs) — 0.6%
700,000		DuPont Fabros Technology LP, Senior Notes, 8.500% due 12/15/17 (a)	714,875
425,000		Host Hotels & Resorts, LP, Senior Notes, 6.375% due 3/15/15	418,625
		Ventas Realty LP/Ventas Capital Corp., Senior Notes:
360,000		6.500% due 6/1/16	349,200
1,165,000		6.750% due 4/1/17	1,132,963
		Total Real Estate Investment Trusts (REITs)	2,615,663
Real Estate Management & Development — 0.6%
660,400		Ashton Woods USA LLC, Ashton Woods Finance Co., Senior Subordinated Notes, step bond to yield 23.322% due 6/30/15 (a)(d)	165,100
		Realogy Corp.:
2,830,000		Senior Notes, 10.500% due 4/15/14	2,462,100
216,770		Senior Toggle Notes, 11.000% due 4/15/14 (b)	179,919
		Total Real Estate Management & Development	2,807,119
Thrifts & Mortgage Finance — 0.2%
880,000		Ocwen Capital Trust I, Junior Subordinated Capital Securities, 10.875% due 8/1/27	778,800
		TOTAL FINANCIALS	61,170,306
HEALTH CARE — 6.3%
Biotechnology — 0.2%
810,000		Talecris Biotherapeutics Holdings Corp., Senior Notes, 7.750% due 11/15/16 (a)	826,200
Health Care Equipment & Supplies — 0.5%
		Biomet Inc.:
910,000		Senior Notes, 10.000% due 10/15/17	993,037
950,000		Senior Toggle Notes, 10.375% due 10/15/17 (b)	1,035,500
		Total Health Care Equipment & Supplies	2,028,537
Health Care Providers & Services — 5.6%
3,515,000		CRC Health Corp., Senior Subordinated Notes, 10.750% due 2/1/16	2,970,175
		HCA Inc.:
3,920,000		Debentures, 7.500% due 11/15/95	3,116,870
40,000		Senior Notes, 6.250% due 2/15/13	39,100
		Senior Secured Notes:
1,380,000		9.625% due 11/15/16 (b)	1,497,300
2,820,000		7.875% due 2/15/20 (a)	2,943,375
2,000,000		IASIS Healthcare LLC/IASIS Capital Corp., Senior Subordinated Notes, 8.750% due 6/15/14	2,035,000
		Tenet Healthcare Corp., Senior Notes:
1,200,000		9.000% due 5/1/15 (a)	1,302,000
3,070,000		10.000% due 5/1/18 (a)	3,453,750

See Notes to Schedule of Investments.

Western Asset High Income Opportunity Fund Inc.

Schedule of Investments (unaudited) (continued)

December 31, 2009

Face Amount		Security	Value
Health Care Providers & Services — 5.6% (continued)
		Universal Hospital Services Inc., Senior Secured Notes:
$	530,000	3.859% due 6/1/15 (e)	$	449,175
1,990,000		8.500% due 6/1/15 (b)	1,970,100
3,635,000		US Oncology Holdings Inc., Senior Notes, 7.178% due 3/15/12 (b)(e)	3,416,900
1,685,000		US Oncology Inc., Senior Secured Notes, 9.125% due 8/15/17	1,777,675
		Total Health Care Providers & Services	24,971,420
Pharmaceuticals — 0.0%
4,870,000		Leiner Health Products Inc., Senior Subordinated Notes, 11.000% due 6/1/12 (c)(d)	6,575
		TOTAL HEALTH CARE	27,832,732
INDUSTRIALS — 10.7%
Aerospace & Defense — 1.6%
190,000		Freedom Group Inc., Senior Secured Notes, 10.250% due 8/1/15 (a)	202,587
5,607,684		Hawker Beechcraft Acquisition Co., Senior Notes, 8.875% due 4/1/15 (b)	3,448,726
1,460,000		L-3 Communications Corp., Senior Subordinated Notes, 5.875% due 1/15/15	1,465,475
1,690,000		TransDigm Inc., Senior Subordinated Notes, 7.750% due 7/15/14 (a)	1,723,800
		Total Aerospace & Defense	6,840,588
Airlines — 2.5%
400,000		American Airlines Inc., Senior Secured Notes, 10.500% due 10/15/12 (a)	420,000
		Continental Airlines Inc.:
180,000		9.250% due 5/10/17	182,925
		Pass-Through Certificates:
206,943		8.312% due 4/2/11	193,491
930,000		7.339% due 4/19/14	848,625
5,145,000		DAE Aviation Holdings Inc., Senior Notes, 11.250% due 8/1/15 (a)	4,373,250
		Delta Air Lines Inc.:
		Pass-Through Certificates:
1,825,000		7.711% due 9/18/11	1,797,625
961,310		8.954% due 8/10/14	855,566
630,000		Subordinated Notes, 9.750% due 12/17/16	641,025
		Senior Secured Notes:
655,000		9.500% due 9/15/14 (a)	683,656
720,000		12.250% due 3/15/15 (a)	723,600
305,916		United Airlines Inc., Pass-Through Certificates, 6.932% due 9/1/11	308,975
		Total Airlines	11,028,738
Building Products — 1.2%
4,265,000		Associated Materials Inc., Senior Discount Notes, 11.250% due 3/1/14	4,137,050
763,378		Nortek Inc., Senior Secured Notes, 11.000% due 12/1/13	801,547
225,000		USG Corp., Senior Notes, 9.750% due 8/1/14 (a)	241,312
		Total Building Products	5,179,909
Commercial Services & Supplies — 2.0%
1,170,000		ACCO Brands Corp., Senior Secured Notes, 10.625% due 3/15/15 (a)	1,292,850
		Altegrity Inc., Senior Subordinated Notes:
280,000		10.500% due 11/1/15 (a)	251,300
2,405,000		11.750% due 5/1/16 (a)	2,083,331
1,080,000		DynCorp International LLC/DIV Capital Corp., Senior Subordinated Notes, 9.500% due 2/15/13	1,098,900
720,000		Geo Group Inc., Senior Notes, 7.750% due 10/15/17 (a)	740,700
		RSC Equipment Rental Inc.:
2,495,000		Senior Notes, 9.500% due 12/1/14	2,510,594
965,000		Senior Secured Notes, 10.000% due 7/15/17 (a)	1,054,262
		Total Commercial Services & Supplies	9,031,937

See Notes to Schedule of Investments.

Western Asset High Income Opportunity Fund Inc.

Schedule of Investments (unaudited) (continued)	December 31, 2009

Face Amount		Security	Value
Machinery — 0.3%
$	730,000	American Railcar Industries Inc., Senior Notes, 7.500% due 3/1/14	$	685,287
530,000		Trimas Corp., Senior Secured Notes, 9.750% due 12/15/17 (a)	522,713
		Total Machinery	1,208,000
Marine — 0.4%
1,710,000		Trico Shipping AS, Senior Secured Notes, 11.875% due 11/1/14 (a)	1,789,088
Road & Rail — 1.9%
		Kansas City Southern de Mexico, Senior Notes:
3,210,000		9.375% due 5/1/12	3,346,425
520,000		7.375% due 6/1/14	509,600
1,755,000		12.500% due 4/1/16	2,027,025
355,000		Kansas City Southern Railway, Senior Notes, 13.000% due 12/15/13	413,575
2,016,000		RailAmerica Inc., Senior Secured Notes, 9.250% due 7/1/17	2,154,600
		Total Road & Rail	8,451,225
Trading Companies & Distributors — 0.8%
770,000		Ashtead Capital Inc., Notes, 9.000% due 8/15/16 (a)	774,813
465,000		Ashtead Holdings PLC, Senior Secured Notes, 8.625% due 8/1/15 (a)	469,650
1,210,000		H&E Equipment Services Inc., Senior Notes, 8.375% due 7/15/16	1,217,562
1,915,000		Penhall International Corp., Senior Secured Notes, 12.000% due 8/1/14 (a)(d)	1,211,238
		Total Trading Companies & Distributors	3,673,263
		TOTAL INDUSTRIALS	47,202,748
INFORMATION TECHNOLOGY — 2.0%
Communications Equipment — 0.5%
3,140,000		Lucent Technologies Inc., Debentures, 6.450% due 3/15/29	2,264,725
IT Services — 0.9%
1,469,700		Ceridian Corp., Senior Notes, 12.250% due 11/15/15 (b)	1,396,215
		First Data Corp.:
250,000		5.625% due 11/1/11	210,000
1,385,000		Senior Notes, 9.875% due 9/24/15	1,284,588
1,050,000		GXS Worldwide Inc., Senior Secured Notes, 9.750% due 6/15/15 (a)	1,036,875
		Total IT Services	3,927,678
Semiconductors & Semiconductor Equipment — 0.6%
350,000		Advanced Micro Devices Inc., Senior Notes, 8.125% due 12/15/17 (a)	350,438
		Freescale Semiconductor Inc.:
		Senior Notes:
1,115,000		8.875% due 12/15/14	1,028,587
363,393		9.125% due 12/15/14 (b)	322,965
905,000		Senior Subordinated Notes, 10.125% due 12/15/16	733,050
		Total Semiconductors & Semiconductor Equipment	2,435,040
		TOTAL INFORMATION TECHNOLOGY	8,627,443
MATERIALS — 8.1%
Chemicals — 1.3%
1,270,000		Ashland Inc., Senior Notes, 9.125% due 6/1/17 (a)	1,397,000
1,665,000		Georgia Gulf Corp., Senior Secured Notes, 9.000% due 1/15/17 (a)	1,689,975
530,000		Koppers Inc., Senior Notes, 7.875% due 12/1/19 (a)	537,950
965,000		Solutia Inc., Senior Notes, 8.750% due 11/1/17	1,009,631
965,000		Terra Capital Inc., Senior Notes, 7.750% due 11/1/19 (a)	1,037,375
		Total Chemicals	5,671,931
Construction Materials — 0.0%
80,000		Headwaters Inc., Senior Secured Notes, 11.375% due 11/1/14 (a)	83,800

See Notes to Schedule of Investments.

Western Asset High Income Opportunity Fund Inc.

Schedule of Investments (unaudited) (continued)	December 31, 2009

Face Amount		Security	Value
Containers & Packaging — 1.2%
$	800,000	Berry Plastics Escrow LLC/Berry Plastics Escrow Corp., Senior Secured Notes, 8.250% due 11/15/15 (a)	$	808,000
510,000		BWAY Corp., Senior Subordinated Notes, 10.000% due 4/15/14 (a)	541,875
725,000		Radnor Holdings Inc., Senior Notes, 11.000% due 3/15/10 (c)(d)(f)	0
640,000		Rock-Tenn Co., Senior Notes, 9.250% due 3/15/16	698,400
1,495,000		Solo Cup Co., Senior Secured Notes, 10.500% due 11/1/13 (a)	1,599,650
1,600,000		Viskase Cos. Inc., Senior Secured Notes, 9.875% due 1/15/18 (a)	1,620,000
		Total Containers & Packaging	5,267,925
Metals & Mining — 2.2%
3,760,000		Metals USA Inc., Senior Secured Notes, 11.125% due 12/1/15	3,821,100
		Novelis Inc., Senior Notes:
2,675,000		7.250% due 2/15/15	2,561,312
80,000		11.500% due 2/15/15 (a)	86,100
1,560,000		Ryerson Inc., Senior Secured Notes, 12.000% due 11/1/15	1,638,000
		Teck Resources Ltd., Senior Secured Notes:
650,000		9.750% due 5/15/14	753,188
540,000		10.250% due 5/15/16	631,800
		Total Metals & Mining	9,491,500
Paper & Forest Products — 3.4%
2,528,158		Abitibi-Consolidated Co. of Canada, Senior Secured Notes, 13.750% due 4/1/11 (a)(c)	2,543,959
4,205,000		Appleton Papers Inc., Senior Secured Notes, 11.250% due 12/15/15 (a)	3,579,506
2,180,000		Georgia-Pacific LLC, Senior Notes, 8.250% due 5/1/16 (a)	2,321,700
		NewPage Corp., Senior Secured Notes:
145,000		10.000% due 5/1/12	104,400
2,250,000		11.375% due 12/31/14 (a)	2,283,750
2,800,259		Newpage Holding Corp., Senior Notes, 7.564% due 11/1/13 (b)(e)	857,580
560,000		PE Paper Escrow GmbH, Senior Secured Notes, 12.000% due 8/1/14 (a)	619,897
		Verso Paper Holdings LLC:
1,410,000		9.125% due 8/1/14	1,353,600
1,380,000		Senior Secured Notes, 11.500% due 7/1/14 (a)	1,524,900
		Total Paper & Forest Products	15,189,292
		TOTAL MATERIALS	35,704,448
TELECOMMUNICATION SERVICES — 8.8%
Diversified Telecommunication Services — 5.4%
1,620,000		CC Holdings GS V LLC, Senior Secured Notes, 7.750% due 5/1/17 (a)	1,733,400
385,000		Cincinnati Bell Telephone Co., Senior Debentures, 6.300% due 12/1/28	302,225
525,000		Frontier Communications Corp., Senior Notes, 8.125% due 10/1/18	534,188
1,555,000		GT Group Telecom Inc., Senior Discount Notes, 13.250% due 2/1/10 (c)(d)(f)	0
980,000		Hawaiian Telcom Communications Inc., Senior Subordinated Notes, 12.500% due 5/1/15 (c)(d)	98
1,345,000		Intelsat Bermuda Ltd., Senior Notes, 11.250% due 6/15/16	1,462,688
1,020,000		Intelsat Corp., Senior Notes, 9.250% due 8/15/14	1,053,150
1,720,000		Intelsat Intermediate Holding Co., Ltd., Senior Discount Notes, step bond to yield 11.315% due 2/1/15	1,775,900
		Intelsat Jackson Holdings Ltd., Senior Notes:
170,000		9.500% due 6/15/16	182,750
3,935,000		11.500% due 6/15/16	4,269,475
		Level 3 Financing Inc., Senior Notes:
2,815,000		12.250% due 3/15/13	2,997,975
620,000		9.250% due 11/1/14	589,000
1,710,000		Nordic Telephone Co. Holdings, Senior Secured Bonds, 8.875% due 5/1/16 (a)	1,816,875

See Notes to Schedule of Investments.

Western Asset High Income Opportunity Fund Inc.

Schedule of Investments (unaudited) (continued)	December 31, 2009

Face Amount		Security	Value
Diversified Telecommunication Services — 5.4% (continued)
$	1,585,000	Qwest Communications International Inc., Senior Notes, 8.000% due 10/1/15 (a)	$	1,636,512
		Wind Acquisition Finance SA:
2,000,000		Senior Bonds, 12.000% due 12/1/15 (a)	2,150,000
120,000		Senior Notes, 11.750% due 7/15/17 (a)	131,700
1,410,000		Wind Acquisition Holdings Finance SpA, Senior Notes, 12.250% due 7/15/17 (a)	1,395,900
1,770,000		Windstream Corp., Senior Notes, 8.625% due 8/1/16	1,809,825
		Total Diversified Telecommunication Services	23,841,661
Wireless Telecommunication Services — 3.4%
1,340,000		ALLTEL Communications Inc., Senior Notes, 10.375% due 12/1/17 (a)(b)(d)	1,616,698
2,000,000		Cricket Communications Inc., Senior Secured Notes, 7.750% due 5/15/16	2,005,000
		Sprint Capital Corp., Senior Notes:
350,000		7.625% due 1/30/11	360,063
605,000		8.375% due 3/15/12	629,200
8,585,000		8.750% due 3/15/32	8,134,287
2,260,000		True Move Co., Ltd., Notes, 10.750% due 12/16/13 (a)	2,192,200
		Total Wireless Telecommunication Services	14,937,448
		TOTAL TELECOMMUNICATION SERVICES	38,779,109
UTILITIES — 8.0%
Electric Utilities — 3.2%
2,390,000		Reliant Energy Mid-Atlantic Power Holdings LLC, Senior Notes, 9.681% due 7/2/26	2,455,725
14,155,000		Texas Competitive Electric Holdings Co. LLC, Senior Notes, 10.250% due 11/1/15	11,536,325
		Total Electric Utilities	13,992,050
Gas Utilities — 0.4%
1,770,000		Suburban Propane Partners LP/Suburban Energy Finance Corp., Senior Notes, 6.875% due 12/15/13	1,778,850
Independent Power Producers & Energy Traders — 4.4%
		AES Corp.:
420,000		Secured Notes, 8.750% due 5/15/13 (a)	432,600
		Senior Notes:
200,000		8.000% due 10/15/17	206,250
560,000		8.000% due 6/1/20	572,600
		Dynegy Holdings Inc.:
2,090,000		Senior Debentures, 7.625% due 10/15/26	1,452,550
2,840,000		Senior Notes, 7.750% due 6/1/19	2,477,900
320,000		Dynegy Inc., Bonds, 7.670% due 11/8/16	308,800
		Edison Mission Energy, Senior Notes:
1,670,000		7.750% due 6/15/16	1,427,850
1,150,000		7.200% due 5/15/19	876,875
1,785,000		7.625% due 5/15/27	1,218,262
		Energy Future Holdings Corp., Senior Notes:
3,470,000		10.875% due 11/1/17	2,854,075
549,928		11.250% due 11/1/17 (b)	391,824
1,045,000		Mirant Americas Generation LLC, Senior Notes, 9.125% due 5/1/31	945,725
		Mirant Mid Atlantic LLC, Pass-Through Certificates:
326,503		9.125% due 6/30/17	342,828
984,037		10.060% due 12/30/28	1,038,159
780,000		Mirant North America LLC, Senior Notes, 7.375% due 12/31/13	775,125
3,250,000		NRG Energy Inc., Senior Notes, 7.250% due 2/1/14	3,298,750

See Notes to Schedule of Investments.

Western Asset High Income Opportunity Fund Inc.

Schedule of Investments (unaudited) (continued)	December 31, 2009

Face Amount		Security	Value
Independent Power Producers & Energy Traders — 4.4% (continued)
$	890,000	RRI Energy Inc., Senior Notes, 7.875% due 6/15/17	$	878,875
		Total Independent Power Producers & Energy Traders	19,499,048
		TOTAL UTILITIES	35,269,948
		TOTAL CORPORATE BONDS & NOTES (Cost — $395,986,876)	394,290,313
ASSET-BACKED SECURITY — 0.0%
FINANCIAL — 0.0%
Diversified Financial Services — 0.0%
9,956,016		Airplanes Pass-Through Trust, Subordinated Notes, 10.875% due 3/15/19 (c)(d)(f) (Cost - $10,575,006)	0
COLLATERALIZED MORTGAGE OBLIGATION — 0.2%
1,407,520		Countrywide Home Loan Mortgage Pass-Through Trust, 5.214% due 4/20/35 (e) (Cost - $881,798)	726,139
COLLATERALIZED SENIOR LOANS — 2.8%
CONSUMER DISCRETIONARY — 0.9%
Auto Components — 0.4%
1,958,724		Allison Transmission Inc., Term Loan B, 3.206% due 8/7/14 (e)	1,803,495
Media — 0.5%
392,621		Idearc Inc., Term Loan, 10.250% due 3/31/10 (e)	387,517
1,500,000		Newsday LLC, Term Loan, 9.750% due 7/15/13 (e)	1,591,875
		Total Media	1,979,392
		TOTAL CONSUMER DISCRETIONARY	3,782,887
ENERGY — 0.5%
Energy Equipment & Services — 0.5%
2,622,691		Turbo Beta Ltd., Term Loan, 14.500% due 3/15/18 (b)(d)(e)	2,255,514
FINANCIALS — 0.8%
Diversified Financial Services — 0.2%
1,000,000		CIT Group Inc., Term Loan, 13.000% due 1/18/12 (e)	1,039,063
Real Estate Management & Development — 0.6%
2,500,000		Realogy Corp., Term Loan, 13.500% due 10/15/17	2,652,083
		TOTAL FINANCIALS	3,691,146
INDUSTRIALS — 0.3%
Airlines — 0.3%
1,489,320		United Airlines Inc., Term Loan B, 2.313% due 1/12/14 (e)	1,172,839
Trading Companies & Distributors — 0.0%
1,332,172		Penhall International Corp., Term Loan, 12.288% due 4/1/12 (e)	73,270
		TOTAL INDUSTRIALS	1,246,109
TELECOMMUNICATION SERVICES — 0.3%
Diversified Telecommunication Services — 0.3%
1,250,000		Level 3 Communications Inc., Term Loan, 11.500% due 3/13/14 (e)	1,335,156
		TOTAL COLLATERALIZED SENIOR LOANS (Cost — $13,325,462)	12,310,812
CONVERTIBLE BONDS & NOTES — 0.4%
INDUSTRIALS — 0.4%
Airlines — 0.0%
110,000		AMR Corp., Senior Notes, 6.250% due 10/15/14	114,538

See Notes to Schedule of Investments.

Western Asset High Income Opportunity Fund Inc.

Schedule of Investments (unaudited) (continued)	December 31, 2009

Face Amount		Security	Value
Marine — 0.4%
$	2,155,000	Horizon Lines Inc., Senior Notes, 4.250% due 8/15/12	$	1,761,712
		TOTAL CONVERTIBLE BONDS & NOTES (Cost — $1,940,781)	1,876,250
SOVEREIGN BOND — 0.7%
Russia — 0.7%
2,726,000		Russian Foreign Bond-Eurobond, Senior Bonds, 7.500% due 3/31/30 (a) (Cost - $2,980,484)	3,104,232

Shares
COMMON STOCKS — 1.6%
CONSUMER DISCRETIONARY — 1.1%
Media — 1.1%
95,153		Charter Communications Inc. (f)	3,377,931
41,739		Charter Communications Inc., Class A Shares *	1,481,735
3,524		Idearc Inc.	167,410
		TOTAL CONSUMER DISCRETIONARY	5,027,076
ENERGY — 0.1%
Oil, Gas & Consumable Fuels — 0.1%
9,017		SemGroup Corp., Class A Shares (f)*	216,419
FINANCIALS — 0.1%
Diversified Financial Services — 0.1%
18,273		CIT Group Inc. *	504,506
INDUSTRIALS — 0.0%
Building Products — 0.0%
2,857		Nortek Inc. *	101,424
MATERIALS — 0.3%
Chemicals — 0.3%
70,396		Georgia Gulf Corp. *	1,223,483
TELECOMMUNICATION SERVICES — 0.0%
Diversified Telecommunication Services — 0.0%
20,125		Pagemart Wireless (d)(f)*	201
		TOTAL COMMON STOCKS (Cost — $8,847,929)	7,073,109
CONVERTIBLE PREFERRED STOCKS — 1.0%
FINANCIALS — 1.0%
Diversified Financial Services — 1.0%
3,030		Bank of America Corp., 7.250%	2,663,370
18,400		Citigroup Inc., 7.500% due 12/15/12*	1,919,856
		TOTAL CONVERTIBLE PREFERRED STOCKS (Cost — $4,848,006)	4,583,226
PREFERRED STOCKS — 0.5%
CONSUMER DISCRETIONARY — 0.3%
Automobiles — 0.3%
22,300		Corts-Ford Motor Co., 7.400%	444,439
17,100		Corts-Ford Motor Co., 8.000%	378,765
1,600		Ford Motor Co., Series F, 7.550%	29,328
900		Motors Liquidation Co., 7.250%	4,736
10,100		Motors Liquidation Co., Senior Notes, 7.250%	54,666
2,600		Motors Liquidation Co., Senior Notes, 7.375%	14,039
31,700		Motors Liquidation Co., Senior Notes, 7.500%	171,576
		Total Automobiles	1,097,549

See Notes to Schedule of Investments.

Western Asset High Income Opportunity Fund Inc.

Schedule of Investments (unaudited) (continued)	December 31, 2009

Shares		Security	Value
Media — 0.0%
4		ION Media Networks Inc., Series B, 12.000% (d)(f)*	$	0
		TOTAL CONSUMER DISCRETIONARY	1,097,549
FINANCIALS — 0.2%
Consumer Finance — 0.1%
1,181		GMAC Inc., 7.000% (a)*	778,501
Diversified Financial Services — 0.1%
3,400		Preferred Plus, Trust, Series FRD-1, 7.400%	62,900
8,400		Saturns, Series F 2003-5, 8.125%	187,740
		Total Diversified Financial Services	250,640
Thrifts & Mortgage Finance — 0.0%
37,200		Federal National Mortgage Association (FNMA), 8.250% (e)(h)*	40,920
		TOTAL FINANCIALS	1,070,061
		TOTAL PREFERRED STOCKS (Cost — $2,974,177)	2,167,610

Warrants
WARRANTS — 0.0%
1,981		Buffets Restaurant Holdings, Expires 4/28/14(d)(f)*	0
2,240		Charter Communications Inc., Expires 11/30/14*	11,197
1,555		GT Group Telecom Inc., Class B Shares, Expires 2/1/10(a)(d)(f)*	0
1,000		Jazztel PLC, Expires 7/15/10(a)(d)(f)*	0
5,518		Nortek Inc., Expires 12/7/14(f)*	70,359
9,492		SemGroup Corp., Expires 11/30/14(d)(f)*	0
1		Turbo Beta Ltd., Expires 11/1/14(d)(f)*	0
		TOTAL WARRANTS (Cost — $197,589)	81,556
		TOTAL INVESTMENTS BEFORE SHORT-TERM INVESTMENT (Cost — $442,558,108)	426,213,247

Face Amount
SHORT-TERM INVESTMENT — 1.2%
Repurchase Agreement — 1.2%
$	5,395,000	Morgan Stanley tri-party repurchase agreement dated 12/31/09, 0.005% due 1/4/10; Proceeds at maturity - $5,395,003; (Fully collateralized by U.S. government agency obligation, 0.900% due 4/8/10; Market value $5,507,857) (Cost - $5,395,000)	5,395,000
		TOTAL INVESTMENTS — 97.7% (Cost — $447,953,108#)	431,608,247
		Other Assets in Excess of Liabilities — 2.3%	10,017,084
		TOTAL NET ASSETS — 100.0%	$	441,625,331

*	Non-income producing security.
(a)	Security is exempt from registration under Rule 144A of the Securities Act of 1933. This security may be resold in transactions that are exempt from registration, normally to qualified institutional buyers. This security has been deemed liquid pursuant to guidelines approved by the Board of Directors, unless otherwise noted.
(b)	Payment-in-kind security for which part of the income earned may be paid as additional principal.
(c)	The coupon payment on these securities is currently in default as of December 31, 2009.
(d)	Illiquid security.
(e)	Variable rate security. Interest rate disclosed is that which is in effect at December 31, 2009.
(f)	Security is valued in good faith at fair value by or under the direction of the Board of Directors (See Note 1).
(g)	Security has no maturity date. The date shown represents the next call date.
(h)	On September 7, 2008, the Federal Housing Finance Agency placed Fannie Mae (FNMA) and Freddie Mac (FHLMC) into conservatorship.
#	Aggregate cost for federal income tax purposes is substantially the same.

See Notes to Schedule of Investments.

Western Asset High Income Opportunity Fund Inc.

Schedule of Investments (unaudited) (continued)	December 31, 2009

See Notes to Schedule of Investments.

Notes to Schedule of Investments (unaudited)

1. Organization and Significant Accounting Policies

Western Asset High Income Opportunity Fund Inc. (the “Fund”) was incorporated in Maryland and is registered as a diversified, closed-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Fund’s primary investment objective is to seek high current income. Capital appreciation is a secondary objective.

The following are significant accounting policies consistently followed by the Fund and are in conformity with U.S. generally accepted accounting principles (“GAAP”).

(a) Investment Valuation. Debt securities are valued at the mean between the last quoted bid and asked prices provided by an independent pricing service, which are based on transactions in debt obligations, quotations from bond dealers, market transactions in comparable securities and various other relationships between securities. Publicly traded foreign government debt securities are typically traded internationally in the over-the-counter market, and are valued at the mean between the last quoted bid and asked prices as of the close of business of that market. Equity securities for which market quotations are available are valued at the last reported sales price or official closing price on the primary market or exchange on which they trade. When prices are not readily available, or are determined not to reflect fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded, but before the Fund calculates its net asset value, the Fund values these securities at fair value as determined in accordance with procedures approved by the Fund’s Board of Directors. Short-term obligations with maturities of 60 days or less are valued at amortized cost, which approximates fair value.

The Fund has adopted Financial Accounting Standards Board Codification Topic 820 (“ASC Topic 820”). ASC Topic 820 establishes a single definition of fair value, creates a three-tier hierarchy as a framework for measuring fair value based on inputs used to value the Fund’s investments, and requires additional disclosure about fair value. The hierarchy of inputs is summarized below.

· Level 1—quoted prices in active markets for identical investments

· Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

· Level 3—significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The Fund uses valuation techniques to measure fair value that are consistent with the market approach and/or income approach, depending on the type of the security and the particular circumstance. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable securities. The income approach uses valuation techniques to convert future amounts to a single present amount.

The following is a summary of the inputs used in valuing the Fund’s assets carried at fair value:

DESCRIPTION	QUOTED PRICES (LEVEL 1)		OTHER SIGNIFICANT OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)		TOTAL
Long-term investments†:
Corporate bonds & notes	—		$	391,454,748	$	2,835,565	$	394,290,313
Asset-backed security	—		—		0		0
Collateralized mortgage obligation	—		726,139		—		726,139
Collateralized senior loans	—		12,310,812		—		12,310,812
Convertible bonds & notes	—		1,876,250		—		1,876,250
Sovereign bond	—		3,104,232		—		3,104,232
Common stocks:
Consumer discretionary	$	1,649,145	3,377,931		—		5,027,076
Energy	—		—		216,419		216,419
Financials	504,506		—		—		504,506
Industrials	101,424		—		—		101,424
Materials	1,223,483		—		—		1,223,483
Telecommunication services	—		—		201		201
Convertible preferred stocks:	4,583,226		—		—		4,583,226
Preferred stocks:
Consumer discretionary	852,532		245,017		—		1,097,549
Financials	291,560		778,501		—		1,070,061
Warrants	—		11,197		70,359		81,556
Total long-term investments	$	9,205,876	$	413,884,827	$	3,122,544	$	426,213,247
Short-term investment†	—		5,395,000		—		5,395,000
Total investments	$	9,205,876	$	419,279,827	$	3,122,544	$	431,608,247

Notes to Schedule of Investments (unaudited) (continued)

†See Schedule of Investments for additional detailed categorizations.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:

						COMMON STOCKS
INVESTMENTS IN SECURITIES	CORPORATE BONDS & NOTES			ASSET- BACKED SECURITIES		CONSUMER STAPLES			ENERGY
Balance as of September 30, 2009	$	247,650		$	0	$	0		$	0
Accrued premiums/discounts	23,638			—		—			—
Realized gain/(loss)	—			—		(235,515		)	—
Change in unrealized appreciation (depreciation)(1)	(106,188		)	—		235,515			(62,434		)
Net purchases (sales)	—			—		—			278,853
Net transfers in and/or out of Level 3	2,670,465			—		—			—
Balance as of December 31, 2009	$	2,835,565		$	0	$	0		$	216,419
Change in unrealized appreciation (depreciation) for investments in securities still held at December 31, 2009 (1)	$	(7,398	)	$	0	$	0		$	(62,434	)

	COMMON STOCKS
INVESTMENTS IN SECURITIES	MATERIALS			TELECOMUNICATION SERVICES			PREFERED STOCKS		WARRANTS		TOTAL
Balance as of September 30, 2009	$	0		$	201		$	0	$	0	$	247,851
Accrued premiums/discounts	—			—			—		—		23,638
Realized gain/(loss)	(2		)	(8,350		)	—		—		(243,867		)
Change in unrealized appreciation (depreciation)(1)	2			8,350			—		—		75,245
Net purchases (sales)	—			—			—		70,359		349,212
Net transfers in and/or out of Level 3	—			—			—		—		2,670,465
Balance as of December 31, 2009	$	0		$	201		$	0	$	70,359	$	3,122,544
Change in unrealized appreciation (depreciation) for investments in securities still held at December 31, 2009 (1)	$	0		$	0		$	0	$	0	$	(69,832	)

Notes to Schedule of Investments (unaudited) (continued)

(1) Change in unrealized appreciation (depreciation) includes net unrealized appreciation (depreciation) resulting from changes in investment values during the reporting period and the reversal of previously recorded unrealized appreciation (depreciation) when gains or losses are realized.

(b) Repurchase Agreements. The Fund may enter into repurchase agreements with institutions that its investment adviser has determined are creditworthy. Each repurchase agreement is recorded at cost. Under the terms of a typical repurchase agreement, a fund takes possession of an underlying debt obligation subject to an obligation of the seller to repurchase, and of the fund to resell, the obligation at an agreed-upon price and time, thereby determining the yield during a fund’s holding period. When entering into repurchase agreements, it is the Fund’s policy that its custodian or a third party custodian, acting on the Fund’s behalf, take possession of the underlying collateral securities, the market value of which, at all times, at least equals the principal amount of the repurchase transaction, including accrued interest. To the extent that any repurchase transaction maturity exceeds one business day, the value of the collateral is marked to market and measured against the value of the agreement to ensure the adequacy of the collateral. If the counterparty defaults, the Fund generally has the right to use the collateral to satisfy the terms of the repurchase transaction. However, if the market value of the collateral declines during the period in which the Fund seeks to assert its rights or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Fund may be delayed or limited.

(c) Credit and Market Risk. The Fund invests in high yield instruments that are subject to certain credit and market risks. The yields of high yield obligations reflect, among other things, perceived credit and market risks. The Fund’s investment in securities rated below investment grade typically involves risks not associated with higher rated securities including, among others, greater risk related to timely and ultimate payment of interest and principal, greater market price volatility and less liquid secondary market trading.

(d) Security Transactions. Security transactions are accounted for on a trade date basis.

2. Investments

At December 31, 2009, the aggregate gross unrealized appreciation and depreciation of investments for federal income tax purposes were as follows:

Gross unrealized appreciation	$	34,464,676
Gross unrealized depreciation	(50,809,537		)
Net unrealized depreciation	$	(16,344,861	)

3. Derivative Instruments and Hedging Activities

Financial Accounting Standards Board Codification Topic 815 (“ASC Topic 815”) requires enhanced disclosure about an entity’s derivative and hedging activities.

During the period ended December 31, 2009, the Fund did not invest in any derivative instruments.

ITEM 2. CONTROLS AND PROCEDURES.

(a) The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a- 3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the disclosure controls and procedures required by Rule 30a-3(b) under the 1940 Act and 15d-15(b) under the Securities Exchange Act of 1934.

(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant’s last fiscal quarter that have materially affected, or are likely to materially affect the registrant’s internal control over financial reporting.

ITEM 3. EXHIBITS.

Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are attached hereto.

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.

Western Asset High Income Opportunity Fund Inc.

By	/s/ R. Jay Gerken
R. Jay Gerken
Chief Executive Officer


Date:		February 24, 2010

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By	/s/ R. Jay Gerken
R. Jay Gerken
Chief Executive Officer


Date:			February 24, 2010


By	/s/ Kaprel Ozsolak
Kaprel Ozsolak
Chief Financial Officer


Date:		February 24, 2010