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 811-10339

Name of Fund: BlackRock Municipal Income Trust (BFK)

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: Donald C. Burke, Chief Executive Officer, BlackRock Municipal Income Trust, 800 Scudders Mill Road, Plainsboro, NJ, 08536. Mailing address: P.O. Box 9011, Princeton, NJ, 08543-9011

Registrant’s telephone number, including area code: (800) 882-0052, Option 4

Date of fiscal year end: 10/31/2008

Date of reporting period: 05/01/2008 – 07/31/2008

Item 1 – Schedule of Investments

BlackRock Municipal Income Trust          
Schedule of Investments July 31, 2008 (Unaudited) (Percentages shown are based on Net Assets)
         
Par
     
State   Municipal Bonds
(000)
   
Value
Alabama - 2.9%   Huntsville, Alabama, Health Care Authority Revenue Bonds,        
    Series B, 5.75%, 6/01/12 (a)
$
      15,000
     
$
 16,551,450
Arizona - 6.7%   Phoenix and Pima County, Arizona, IDA, S/F Mortgage Revenue        
    Refunding Bonds, AMT, Series 2007-1, 5.25%, 8/01/38 (b)(c) 5,213     5,135,002
    Pima County, Arizona, IDA, Education Revenue Bonds (American        
    Charter Schools Foundation), Series A, 5.625%, 7/01/38 4,590     4,038,466
    Salt Verde Financial Corporation, Arizona, Senior Gas Revenue Bonds,        
    5%, 12/01/32   10,280     8,739,748
    Salt Verde Financial Corporation, Arizona, Senior Gas Revenue Bonds,        
    5%, 12/01/37   14,395     11,971,458
    Scottsdale, Arizona, IDA, Hospital Revenue Bonds (Scottsdale        
    Healthcare), 5.80%, 12/01/11 (a)   7,000           7,711,620
              37,596,294
California - 17.1%                    California County Tobacco Securitization Agency, Tobacco Revenue        
    Bonds (Stanislaus County Tobacco Funding Corporation), Sub-Series C,        
    6.30%, 6/01/55 (d)   17,855     349,244
    California State, GO, Refunding, 5%, 6/01/32   11,670     11,430,415
    California State, GO, Refunding, 5%, 6/01/34   7,000     6,817,300
    California Statewide Communities Development Authority, Health        
    Facility Revenue Bonds (Memorial Health Services), Series A, 5.50%,        
    10/01/33   5,000     4,925,900
    Foothill/Eastern Corridor Agency, California, Toll Road Revenue        
    Refunding Bonds, 6.09%, 1/15/32 (d)   54,635     11,645,450
    Foothill/Eastern Corridor Agency, California, Toll Road Revenue        
    Refunding Bonds, 6.019%, 1/15/34 (d)   20,535     3,836,554
    Foothill/Eastern Corridor Agency, California, Toll Road Revenue        
    Refunding Bonds, 6.09%, 1/15/38 (d)   75,000     10,492,500
    Golden State Tobacco Securitization Corporation of California,        
    Tobacco Settlement Revenue Bonds, Series A-1,          
    6.625%, 6/01/13 (a)   10,000     11,371,700
    Lincoln, California, Special Tax Bonds (Community Facilities District        
    Number 2003-1), 6%, 9/01/13 (a)   3,115     3,558,763
    Los Angeles, California, Regional Airports Improvement        
    Corporation, Facilities Lease Revenue Refunding Bonds        
    (LAXFUEL Corporation - Los Angeles International Airport),        
    AMT, 5.50%, 1/01/32 (e)   13,320     13,044,675
    Murrieta, California, Community Facilities District Number 2, Special        
    Special Tax Bonds (The Oaks Improvement Area Project),        
    Series A, 6%, 9/01/34   5,000     4,833,600
Portfolio Abbreviations          

To simplify the listings of portfolio holdings in the Schedule of Investments, the names of many of the securities have been abbreviated according to the list below.

AMT   Alternative Minimum Tax (subject to)   IDA   Industrial Development Authority
EDA   Economic Development Authority   IDR   Industrial Development Revenue Bonds
EDR   Economic Development Revenue Bonds   M/F   Multi-Family
GO   General Obligation Bonds   PCR   Pollution Control Revenue Bonds
HFA   Housing Finance Authority   S/F   Single-Family
HDA   Housing Development Authority   SIFMA   Securities Industry and Financial Markets
            Association

1

BlackRock Municipal Income Trust          
Schedule of Investments July 31, 2008 (Unaudited) (Percentages shown are based on Net Assets)
     
Par
     
State   Municipal Bonds
(000)
   
Value
    University of California Revenue Bonds, Series B, 4.75%, 5/15/38 $
      10,565
     
$
 10,125,707
    West Valley Mission Community College District, California, GO          
    (Election of 2004), Series A, 4.75%, 8/01/30 (f)   4,015     3,950,399
                  96,382,207
Colorado - 1.8%   Colorado Health Facilities Authority, Revenue Refunding Bonds          
    (Poudre Valley Health Care), 5.20%, 3/01/31 (f)   1,440           1,451,505
    Colorado Springs, Colorado, Utilities System Improvement Revenue          
    Bonds, Subordinate Lien, Series C, 5%, 11/15/45 (f)   2,545     2,515,096
    Denver, Colorado, Health and Hospital Authority, Healthcare Revenue          
    Bonds, Series A, 6%, 12/01/11 (a)   3,500     3,849,580
    Park Creek Metropolitan District, Colorado, Senior Limited Tax          
    Supported Revenue Refunding Bonds, 5.50%, 12/01/37   2,530     2,307,613
              10,123,794
District of Columbia - 7.2%   District of Columbia Revenue Bonds (Georgetown University),          
    Series A, 6.013%, 4/01/11 (a)(d)(g)   15,600     3,287,388
    District of Columbia Revenue Bonds (Georgetown University),          
    Series A, 6.015%, 4/01/11 (a)(d)(g)   51,185     10,160,222
    District of Columbia, Revenue Refunding Bonds (Friendship Public          
    Charter School, Inc.), 5.25%, 6/01/33 (h)   2,390     1,975,717
    District of Columbia Tobacco Settlement Financing Corporation, Asset-        
    Backed Revenue Refunding Bonds, 6.75%, 5/15/40   25,535     25,267,648
              40,690,975
Florida - 9.8%   Heritage Isle at Viera Community Development District, Florida,          
    Special Assessment Bonds, Series A, 6%, 5/01/35   1,905     1,855,336
    Highlands County, Florida, Health Facilities Authority, Hospital          
    Revenue Bonds (Adventist Health System), Series A,          
    6%, 11/15/11 (a)   9,670     10,675,293
    Martin County, Florida, IDA, IDR, Refunding (Indiantown Cogeneration          
    Project), AMT, Series A, 7.875%, 12/15/25   9,000     9,016,650
    Miami Beach, Florida, Health Facilities Authority, Hospital Revenue          
    Refunding Bonds (Mount Sinai Medical Center of Florida), 6.75%,          
    11/15/21   11,685     11,886,449
    Orange County, Florida, Tourist Development, Tax Revenue Refunding          
    Bonds, 4.75%, 10/01/32 (i)   10,830     10,092,585
    Stevens Plantation Community Development District, Florida, Special          
    Assessment Revenue Bonds, Series A, 7.10%, 5/01/35   3,830     3,832,987
    Village Community Development District Number 5, Florida, Special          
    Assessment Bonds, 5.625%, 5/01/22   7,965     7,796,461
              55,155,761
Georgia - 1.2%   Main Street Natural Gas, Inc., Georgia, Gas Project Revenue Bonds,          
    Series A, 6.375%, 7/15/38   3,500     3,190,670
    Richmond County, Georgia, Development Authority, Environmental          
    Improvement Revenue Refunding Bonds (International Paper Co.          
    Projects), AMT, Series A, 6%, 2/01/25   4,000     3,648,600
              6,839,270
Idaho - 3.2%   University of Idaho, Student Fee Revenue Bonds (University Housing          
    Improvement Projects), 5.40%, 4/01/11 (a)(j)   16,970     18,163,161

2

BlackRock Municipal Income Trust          
Schedule of Investments as of July 31, 2008 (Unaudited) (Percentages shown are based on Net Assets)
     
Par
     
State       Municipal Bonds
(000)
   
Value
Illinois - 8.5%                            Bolingbrook, Illinois, GO, Refunding, Series B, 6%, 1/01/33 (d)(j) $
7,120
     
$
       1,796,590
    Bolingbrook, Illinois, GO, Refunding, Series B, 6%, 1/01/34 (d)(j)         14,085     3,309,693
    Centerpoint Intermodal Center Program Trust, Illinois, Tax Allocation          
    Bonds, Class A, 8%, 6/15/23 (k)   4,630     4,229,737
    Illinois Educational Facilities Authority, Revenue Refunding Bonds          
    (University of Chicago), Series A, 5.25%, 7/01/41   760     766,194
    Illinois Educational Facilities Authority, Student Housing Revenue          
    Bonds (Education Advancement Fund - University Center Project at          
    DePaul), 6.25%, 5/01/12 (a)   10,000     11,227,000
    Illinois Health Facilities Authority, Revenue Refunding Bonds          
    (Elmhurst Memorial Healthcare), 5.50%, 1/01/22   5,000     4,929,850
    Illinois Health Facilities Authority, Revenue Refunding Bonds          
    (Elmhurst Memorial Healthcare), 5.625%, 1/01/28   6,000     5,864,640
    Illinois Municipal Electric Agency, Power Supply Revenue Bonds,          
    4.50%, 2/01/35 (j)   7,975     7,000,216
    Illinois State Finance Authority Revenue Bonds (Friendship Village of          
    Schaumburg), Series A, 5.625%, 2/15/37   1,685     1,325,808
    Illinois State Finance Authority Revenue Bonds (Monarch Landing, Inc.          
    Project), Series A, 7%, 12/01/37   2,885     2,777,130
    Illinois State Finance Authority Revenue Bonds (Northwestern          
    Memorial Hospital), Series A, 5.50%, 8/15/14 (a)   3,700     4,112,365
    Illinois State Finance Authority, Student Housing Revenue Bonds (MJH          
    Education Assistance IV LLC), Sub-Series B, 5.375%, 6/01/35   1,675     494,041
              47,833,264
Indiana - 6.1%   Indiana Health Facilities Financing Authority, Hospital Revenue          
    Refunding Bonds (Methodist Hospital, Inc.), 5.50%, 9/15/31   9,000     7,833,510
    Petersburg, Indiana, PCR, Refunding (Indianapolis Power & Light Co.          
    Project), AMT, 5.90%, 12/01/24   10,000     9,531,900
    Petersburg, Indiana, PCR, Refunding (Indianapolis Power & Light Co.          
    Project), AMT, 5.95%, 12/01/29   16,000     15,095,840
    Vincennes, Indiana, EDR, Refunding, 6.25%, 1/01/24   2,305     2,061,315
              34,522,565
Kentucky - 0.2%   Kentucky Housing Corporation, Housing Revenue Bonds, AMT,          
    Series F, 5.45%, 1/01/32 (l)(m)   1,365     1,276,015
Louisiana - 2.1%   Louisiana Local Government Environmental Facilities and          
    Community Development Authority, Revenue Bonds (Capital          
    Projects and Equipment Acquisition Program), 6.55%, 9/01/25 (h)   9,215     8,787,147
    Saint Tammany Parish, Louisiana, Financing Authority, S/F          
    Mortgage Revenue Bonds (Home Ownership Program),          
    Series A, 5.25%, 12/01/39 (b)(c)   3,187     3,114,926
              11,902,073
Maryland - 0.6%   Maryland State Community Development Administration,          
    Department of Housing and Community Development, Residential          
    Revenue Refunding Bonds, AMT, Series A, 4.65%, 9/01/32   2,665     2,180,690
    Maryland State Health and Higher Educational Facilities Authority,          
    Revenue Refunding Bonds (MedStar Health, Inc.), 5.50%, 8/15/33   1,205     1,163,693
              3,344,383

3

BlackRock Municipal Income Trust          
Schedule of Investments July 31, 2008 (Unaudited) (Percentages shown are based on Net Assets)
         
Par
     
State   Municipal Bonds
(000)
       
Value
Michigan - 0.7%   Michigan State Hospital Finance Authority, Revenue Refunding Bonds          
    (Henry Ford Health System), Series A, 5.25%, 11/15/46 $
4,230
 
$
       3,795,156
Mississippi - 3.3%                   Gulfport, Mississippi, Hospital Facility Revenue Bonds (Memorial          
    Hospital at Gulfport Project), Series A, 5.75%, 7/01/31         18,680     18,514,682
Missouri - 0.1%   Missouri Joint Municipal Electric Utility Commission, Power Project          
    Revenue Bonds (Plum Point Project), 4.60%, 1/01/36   695     577,024
Nebraska - 1.2%   Omaha Public Power District, Nebraska, Electric System Revenue          
    Bonds, Series A, 4.75%, 2/01/44   6,990     6,579,687
Nevada - 0.9%   Clark County, Nevada, EDR, Refunding (Alexander Dawson School of          
    Nevada Project), 5%, 5/15/29   5,260     5,049,390
New Hampshire - 1.3%   New Hampshire Health and Education Facilities Authority Revenue          
    Bonds (Exeter Hospital Obligated Group), 5.75%, 10/01/31   3,500     3,512,075
    New Hampshire State Business Finance Authority, PCR, Refunding          
    (Public Service Company Project), AMT, Series B,          
    4.75%, 5/01/21 (g)   4,000     3,706,560
              7,218,635
New Jersey - 7.9%   Middlesex County, New Jersey, Improvement Authority, Subordinate          
    Revenue Bonds (Heldrich Center Hotel/Conference Project), Series B,          
    6.25%, 1/01/37   3,680     3,073,904
    New Jersey EDA, Cigarette Tax Revenue Bonds, 5.75%, 6/15/29   18,500     17,325,805
    New Jersey EDA, EDR, Refunding (Kapkowski Road Landfill          
    Reclamation Improvement District Project), 6.50%, 4/01/28   8,000     7,924,640
    New Jersey EDA, Special Facility Revenue Bonds (Continental Airlines          
    Inc. Project), AMT, 7%, 11/15/30   15,410     12,039,217
    Tobacco Settlement Financing Corporation of New Jersey, Asset-          
    Backed Revenue Refunding Bonds, Series 1A, 4.50%, 6/01/23   4,620     4,120,763
              44,484,329
New York - 4.5%   Albany, New York, IDA, Civic Facility Revenue Bonds (New Covenant          
    Charter School Project), Series A, 7%, 5/01/35   1,820     1,376,776
    New York City, New York, City IDA, Special Facility Revenue          
    Bonds (American Airlines, Inc. - JFK International Airport),          
    AMT, 8%, 8/01/28   5,000     4,382,000
    New York City, New York, City IDA, Special Facility Revenue Bonds          
    (Continental Airlines Inc. Project), AMT, 7.75%, 8/01/31   22,140     18,759,886
    New York Liberty Development Corporation Revenue Bonds (Goldman          
    Sachs Headquarters), 5.25%, 10/01/35   675     689,749
              25,208,411
North Carolina - 3.5%   Gaston County, North Carolina, Industrial Facilities and Pollution          
    Control Financing Authority, Revenue Bonds (National Gypsum          
    Company Project), AMT, 5.75%, 8/01/35   12,130     9,412,637
    North Carolina Capital Facilities Finance Agency, Revenue          
    Refunding Bonds (Duke University Project),          
    Series B, 4.25%, 7/01/42   12,550     10,529,701
              19,942,338
Ohio - 2.3%   American Municipal Power, Inc., Ohio, Revenue Refunding Bonds          
    (Prairie State Energy Campus Project), Series A, 5%, 2/15/38   7,150     6,810,947

4

BlackRock Municipal Income Trust          
Schedule of Investments July 31, 2008 (Unaudited) (Percentages shown are based on Net Assets)
     
Par
     
State       Municipal Bonds
(000)
   
Value
    Buckeye Tobacco Settlement Financing Authority, Ohio, Tobacco          
    Settlement Asset-Backed Bonds, Series A-2, 6.50%, 6/01/47 $
3,120
     
$
       2,773,462
    Pinnacle Community Infrastructure Financing Authority, Ohio,          
    Revenue Bonds, Series A, 6.25%, 12/01/36   3,760     3,444,160
              13,028,569
Oklahoma - 1.7%                 Oklahoma State Development Finance Authority, Revenue Refunding          
    Bonds (Saint John Health System), 5%, 2/15/42   3,505     3,299,081
    Tulsa, Oklahoma, Municipal Airport Trust, Revenue Refunding Bonds,          
    Series A, 7.75%, 6/01/35   7,175     6,515,905
              9,814,986
Pennsylvania - 4.3%   Pennsylvania Economic Development Financing Authority, Exempt          
    Facilities Revenue Bonds (Amtrak Project), AMT, Series A, 6.375%,          
    11/01/41   6,500     6,437,145
    Pennsylvania Economic Development Financing Authority, Exempt          
    Facilities Revenue Bonds (Reliant Energy), AMT,          
    Series A, 6.75%, 12/01/36   15,580     15,622,689
    Pennsylvania HFA, S/F Mortgage Revenue Refunding Bonds, AMT,          
    Series 97A, 4.60%, 10/01/27   2,500     2,109,375
              24,169,209
South Carolina - 6.8%   Lexington County, South Carolina, Health Services District Inc.,          
    Hospital Revenue Refunding and Improvement Bonds,          
    5.50%, 11/01/13 (a)   5,000     5,477,000
    Lexington County, South Carolina, Health Services District Inc.,          
    Hospital Revenue Refunding and Improvement Bonds,          
    5.75%, 11/01/13 (a)   10,000     11,073,000
    Scago Education Facilities Corporation for Chesterfield County          
    School District, South Carolina, Revenue Refunding Bonds,          
    5%, 12/01/29 (o)   6,345     6,254,520
    South Carolina Jobs EDA, Hospital Facilities Revenue Refunding Bonds          
    (Palmetto Health Alliance), Series A, 6.25%, 8/01/31   5,075     5,122,604
    South Carolina Jobs EDA, Hospital Facilities Revenue Refunding Bonds          
    (Palmetto Health Alliance), Series C, 6.875%, 8/01/13 (a)   9,000     10,486,430
              38,413,554
Tennessee - 2.6%   Knox County, Tennessee, Health, Educational and Housing Facilities          
    Board, Hospital Facilities Revenue Refunding Bonds (Covenant          
    Health), Series A, 5.70%, 1/01/20 (d)(f)   20,825     11,244,459
    Shelby County, Tennessee, Health, Educational and Housing Facility          
    Board, Hospital Revenue Refunding Bonds (Saint Jude Children's          
    Research Hospital), 5%, 7/01/25   3,475     3,474,861
              14,719,320
Texas - 15.2%   Brazos River Authority, Texas, PCR, Refunding (TXU Energy Company          
    LLC Project), AMT, Series A, 8.25%, 10/01/30   4,370     4,308,908
    Harris County-Houston Sports Authority, Texas, Revenue Refunding          
    Bonds, Junior Lien, Series H, 6.065%, 11/15/35 (d)(g)   5,000     891,400

5

BlackRock Municipal Income Trust          
Schedule of Investments July 31, 2008 (Unaudited) (Percentages shown are based on Net Assets)
     
Par
     
State       Municipal Bonds
(000)
   
Value
    Harris County-Houston Sports Authority, Texas, Revenue Refunding            
    Bonds, Senior Lien, Series A, 5.832%, 11/15/38 (d)(g)
$
      12,580
 
$
       1,871,904
    Harris County-Houston Sports Authority, Texas, Revenue Refunding        
    Bonds, Third Lien, Series A-3, 5.97%, 11/15/37 (d)(g)   26,120     4,089,870
    Lower Colorado River Authority, Texas, Revenue Refunding Bonds, 5%,        
    5/15/13 (a)(g)   50     54,122
    Lower Colorado River Authority, Texas, Revenue Refunding Bonds, 5%,        
    5/15/31 (g)   2,345     2,301,031
    Lower Colorado River Authority, Texas, Revenue Refunding Bonds,        
    Series A, 5%, 5/15/13 (a)(g)   5     5,412
    Lower Colorado River Authority, Texas, Transmission Contract        
    Revenue Refunding Bonds (LCRA Transmission Services Corp. Project),        
    4.75%, 5/15/34 (e)   13,305     12,459,068
    Montgomery County, Texas, Municipal Utility District Number 46,        
    Waterworks and Sewer System, GO, 4.75%, 3/01/30 (g)   1,700     1,616,207
    North Texas Tollway Authority, System Revenue Refunding Bonds,        
    Second Tier, Series F, 6.125%, 1/01/31   12,180     12,327,378
    SA Energy Acquisition Public Facilities Corporation, Texas, Gas Supply        
    Revenue Bonds, 5.50%, 8/01/25   6,540     6,214,504
    Texas State Affordable Housing Corporation, M/F Housing Revenue        
    Bonds (Amern Opportunity Housing Portfolio), Series B,          
    8%, 3/01/32 (p)   4,435     443,766
    Texas State Turnpike Authority, Central Texas Turnpike System        
    Revenue Bonds, 6.07%, 8/15/32 (d)(e)   35,000     8,009,050
    Texas State Turnpike Authority, Central Texas Turnpike System        
    Revenue Bonds, 6.08%, 8/15/33 (d)(e)   62,325     13,315,736
    Texas State Turnpike Authority, Central Texas Turnpike System        
    Revenue Bonds, 6.08%, 8/15/34 (d)(e)   65,040     13,065,235
    Texas State Turnpike Authority, Central Texas Turnpike System        
    Revenue Bonds, First Tier, Series A, 5%, 8/15/42 (e)   5,000     4,774,400
              85,747,991
Virginia - 0.4%   Virginia Commonwealth Transportation Board, Transportation        
    Contract Revenue Refunding Bonds (U.S. Route 28 Project), 5.287%,        
    4/01/32 (d)   8,105     2,173,113
Washington - 0.8%             Washington State Health Care Facilities Authority, Revenue        
    Refunding Bonds (Providence Health System), Series A,          
    4.625%, 10/01/34 (j)   5,095     4,569,094
West Virginia - 0.4%   West Virginia EDA, Lease Revenue Bonds (Correctional, Juvenile and        
    Public Safety Facilities), Series A, 5%, 6/01/29 (g)   2,070     2,033,051
Wisconsin - 6.9%   Wisconsin State Health and Educational Facilities Authority Revenue        
    Bonds (Aurora Health Care, Inc.), 6.40%, 4/15/33   7,500     7,625,475
    Wisconsin State Health and Educational Facilities Authority, Revenue        
    Refunding Bonds (Froedtert and Community Health), 5.375%,        
    10/01/11 (a)   12,545     13,647,706

6

BlackRock Municipal Income Trust          
Schedule of Investments July 31, 2008 (Unaudited) (Percentages shown are based on Net Assets)
     
Par
     
State   Municipal Bonds
(000)
   
Value
        Wisconsin State Health and Educational Facilities Authority, Revenue        
    Refunding Bonds (Froedtert and Community Health), 5.375%,            
    10/01/30
$
1,205
 
$
       1,220,810
    Wisconsin State Health and Educational Facilities Authority, Revenue        
    Refunding Bonds (Wheaton Franciscan Services, Inc.),        
    5.75%, 2/15/12 (a)         15,000     16,552,650
              39,046,641
Wyoming - 0.8%                 Wyoming Community Development Authority, Housing Revenue Bonds,        
    AMT, Series 3, 4.65%, 12/01/27   2,765     2,356,250
    Wyoming Community Development Authority, Housing Revenue Bonds,        
    AMT, Series 3, 4.70%, 12/01/32   2,605     2,143,186
              4,499,436
Multi-State - 8.0%   Charter Mac Equity Issuer Trust, 6.30%, 6/30/49 (k)(q) 11,000     11,336,050
    Charter Mac Equity Issuer Trust, 6.625%, 6/30/49 (k)(q) 1,000     1,032,720
    Charter Mac Equity Issuer Trust, 6.80%, 11/30/50 (k)(q) 6,500     6,960,395
    Charter Mac Equity Issuer Trust, 6.80%, 10/31/52 (k)(q) 16,000     17,746,400
    MuniMae TE Bond Subsidiary LLC, 6.875%, 6/30/49 (k)(q) 8,000     8,213,120
              45,288,685
Puerto Rico - 1.0%   Puerto Rico Commonwealth Highway and Transportation Authority,        
    Transportation Revenue Refunding Bonds, Series N,          
    5.25%, 7/01/36 (o)   5,000     5,118,300
    Total Municipal Bonds - 142.0%         800,372,813
    Municipal Bonds Transferred to          
    Tender Option Bond Trusts (r)          
Alabama - 0.8%   Birmingham, Alabama, Special Care Facilities Financing Authority,        
    Revenue Refunding Bonds (Ascension Health Credit),          
    Series C-2, 5%, 11/15/36   4,548     4,387,472
California - 1.9%   Sacramento County, California, Airport System Revenue Bonds, AMT,        
    Senior Series B, 5.25%, 7/01/39 (f)   6,223     5,957,051
    University of California Revenue Bonds, Series C, 4.75%, 5/15/37 (g) 5,000     4,722,600
              10,679,651
Colorado -3.5 %   Colorado Health Facilities Authority Revenue Bonds (Catholic Health),        
    Series C-3, 5.10%, 10/01/41 (f)   7,604     7,531,422
    Colorado Health Facilities Authority Revenue Bonds (Catholic Health),        
    Series C-7, 5%, 9/01/36 (f)   4,859     4,786,663
    Colorado Health Facilities Authority, Revenue Refunding Bonds        
    (Poudre Valley Health Care), Series B, 5.25%, 3/01/36 (f) 2,878     2,885,215
    Colorado Health Facilities Authority, Revenue Refunding Bonds        
    (Poudre Valley Health Care), Series C, 5.25%, 3/01/40 (f) 4,994     4,992,194
              20,195,494
Connecticut - 3.3%   Connecticut State Health and Educational Facilities Authority Revenue        
    Bonds (Yale University), Series T-1, 4.70%, 7/01/29   9,404     9,400,862
    Connecticut State Health and Educational Facilities Authority Revenue        
    Bonds (Yale University), Series X-3, 4.85%, 7/01/37   9,358     9,378,236
              18,779,098

7

BlackRock Municipal Income Trust            
Schedule of Investments July 31, 2008 (Unaudited) (Percentages shown are based on Net Assets)
     
Par
       
State       Municipal Bonds Transferred to Tender Option Bond Trusts (r)
(000)
   
Value
 
Illinois - 2.8%   Chicago, Illinois, Housing Authority, Capital Program Revenue            
    Refunding Bonds, 5%, 7/01/24 (f) $ 8,234  
$
 8,438,934  
    Chicago, Illinois, O'Hare International Airport Revenue Refunding            
    Bonds, Third Lien, AMT, Series C-2, 5.25%, 1/01/30 (f)   7,648         7,251,486  
              15,690,420  
Massachusetts - 1.2%       Massachusetts State Water Resource Authority, General Revenue            
    Refunding Bonds, Series A, 5%, 8/01/41   6,763     6,708,889  
New York - 1.0%   New York State Environmental Facilities Corporation, State Clean            
    Water and Drinking Revenue Bonds (New York City Water            
    Project), Series B, 5%, 6/15/31   5,370     5,411,027  
Ohio - 3.2%   Ohio State Air Quality Development Authority, Revenue Refunding            
    Bonds (Dayton Power and Light Company Project), Series B,            
    4.80%, 1/01/34 (j)(s)         18,818     18,069,543  
Virginia - 3.2%   University of Virginia, Revenue Refunding Bonds, 5%, 6/01/40   10,755     10,955,151  
    Virginia State, HDA, Commonwealth Mortgage Revenue Bonds,            
    Series H, Sub-Series H-1, 5.35%, 7/01/31 (g)   6,810     6,861,143  
              17,816,294  
Washington - 1.6%   Central Puget Sound Regional Transportation Authority,            
    Washington, Sales and Use Tax Revenue Bonds,            
    Series A, 5%, 11/01/32 (f)   5,460     5,524,100  
    King County, Washington, Sewer Revenue Refunding Bonds,            
    5%, 1/01/36 (f)   3,613     3,607,819  
              9,131,919  
    Total Municipal Bonds Transferred to Tender Option Bond            
    Trusts - 22.5%         126,869,807  
    Total Long-Term Investments (Cost - $955,993,376) - 164.5%         927,242,620  
 
    Short-Term Securities
Shares
       
    Merrill Lynch Institutional Tax-Exempt Fund, 2.08% (n)(t) 5,500,000     5,500,000  
    Total Short-Term Securities (Cost - $5,500,000) - 1.0%         5,500,000  
    Total Investments (Cost - $961,493,376*) - 165.5%         932,742,620  
    Other Assets Less Liabilities - 1.1%         6,262,731  
    Liability for Trust Certificates, Including Interest            
    Expense and Fees Payable - (14.6)%         (82,170,250
)
    Preferred Shares, at Redemption Value - (52.0)%     (293,259,911
)
    Net Assets Applicable to Common Shares - 100.0%  
$
 563,575,190  

*    

The cost and unrealized appreciation (depreciation) of investments as of July 31, 2008, as computed for federal income tax purposes, were as follows:
 
Aggregate cost                   $
   879,243,906
 
Gross unrealized appreciation   $
22,720,305
 
Gross unrealized depreciation    
(51,184,617
)
Net unrealized depreciation   $
(28,464,312
)

(a)  

U.S. government securities, held in escrow, are used to pay interest on this security as well as to retire the bond in full at the date indicated, typically at a premium to par.
 
(b)  

FHLMC Collateralized.
 
(c)  

FNMA/GNMA Collateralized.
 
(d)  

Represents a zero-coupon bond. Rate shown reflects the effective yield at time of purchase.
 
(e)  

AMBAC Insured.
 
(f)  

FSA Insured.
 

8

BlackRock Municipal Income Trust
Schedule of Investments July 31, 2008 (Unaudited)

(g)  

MBIA Insured.
 
(h)  

ACA Insured.
 
(i)  

XL Capital Insured.
 
(j)  

FGIC Insured.
 
(k)  

Security exempt from registration under Rule 144a of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors. Unless otherwise indicated, these securities are considered to be liquid.
 
(l)  

FHA Insured.
 
(m)  

FNMA Collateralized.
 
(n)  

Represents the current yield as of report date.
 
(o)  

Assured Guaranty Insured.
 
(p)  

Issuer filed for bankruptcy or is in default of interest payments.
 
(q)  

Security represents a beneficial interest in a trust. The collateral deposited into the trust is federally tax-exempt revenue bonds issued by various state or local governments, or their respective agencies or authorities. The security is subject to remarketing prior to its stated maturity, and is subject to mandatory redemption at maturity.
 
(r)  

Securities represent underlying bonds transferred to a tender option bond trust in exchange for which the the Fund acquired the residual interest certificates. These securities serve as collateral in a financing transaction.
 
(s)  

BHAC Insured.
 
(t)  

Investments in companies considered to be an affiliate of the Trust, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, were as follows:
 
   
Net
     
Affiliate   Activity      
Income
Merrill Lynch Institutional Tax-Exempt Fund                      2,900,000   $            340,576

  • Forward interest rate swaps outstanding as of July 31, 2008 were as follows:
 
   
Notional
     
   
Amount
 
Unrealized
   
(000)
     
(Depreciation)
Pay a fixed rate of 3.639% and receive a floating rate                                  
based on 1-week SIFMA Municipal Swap Index Rate            
Broker, JPMorgan Chase            
Expires September 2018   $ 48,310   $ (793,009)
 
Pay a fixed rate of 3.762% and receive a floating rate            
based on 1-week SIFMA Municipal Swap Index Rate            
Broker, JPMorgan Chase            
Expires October 2023   $ 50,000     (475,500)
 
Pay a fixed rate of 3.919% and receive a floating rate            
based on 1-week SIFMA Municipal Swap Index Rate            
Broker, Citibank NA            
Expires September 2028   $ 17,160     (308,605)
Total         $ (1,577,114)

9

Item 2 – Controls and Procedures

2(a) –     The registrant’s principal executive and principal financial officers or persons performing similar functions 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 of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended.

2(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 reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 3 – Exhibits

Certifications – Attached hereto

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.

BlackRock Municipal Income Trust

By:      /s/ Donald C. Burke
  Donald C. Burke
  Chief Executive Officer of
  BlackRock Municipal Income Trust                             
   
  Date: September 19, 2008

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/ Donald C. Burke
  Donald C. Burke
  Chief Executive Officer (principal executive officer) of
  BlackRock Municipal Income Trust
   
  Date: September 19, 2008
   
By: /s/ Neal J. Andrews
  Neal J. Andrews
  Chief Financial Officer (principal financial officer) of
  BlackRock Municipal Income Trust
   
  Date: September 19, 2008