Vanguard Bond Index Funds - Post-Effective Amendment (investment company, rule 485(b)) (485BPOS)

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT (NO. 33-6001) UNDER
THE SECURITIES ACT OF 1933

PRE-EFFECTIVE AMENDMENT NO.
POST-EFFECTIVE AMENDMENT NO. 48

AND

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940

AMENDMENT NO. 50

VANGUARD BOND INDEX FUNDS
(EXACT NAME OF REGISTRANT AS SPECIFIED IN DECLARATION OF TRUST)

P.O. BOX 2600, VALLEY FORGE, PA 19482
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)

REGISTRANT'S TELEPHONE NUMBER (610) 669-1000

HEIDI STAM, ESQUIRE
P.O. BOX 876
VALLEY FORGE, PA 19482

IT IS PROPOSED THAT THIS FILING BECOME EFFECTIVE
ON APRIL 25, 2008 PURSUANT TO PARAGRAPH (B) OF RULE 485.

Vanguard/(R)/ Bond Index Funds

> Prospectus

Investor Shares & Admiral(TM) Shares

April 25, 2008

[Vanguard Ship Logo/R/]

Vanguard Total Bond Market Index Fund

Vanguard Short-Term Bond Index Fund

Vanguard Intermediate-Term Bond Index Fund

Vanguard Long-Term Bond Index Fund

This prospectus contains financial data for the Funds through the fiscal year ended December 31, 2007.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

Contents

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Vanguard Fund Profiles 1 Financial Highlights 33
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 Total Bond Market Index Fund 1 Investing With Vanguard 42
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 Short-Term Bond Index Fund 5 Purchasing Shares 42
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 Intermediate-Term Bond Index Fund 9 Converting Shares 45
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 Long-Term Bond Index Fund 13 Redeeming Shares 47
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Investing in Index Funds 18 Exchanging Shares 50
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More on the Funds 19 Frequent-Trading Limits 50
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 The Funds and Vanguard 29 Other Rules You Should Know 52
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 Investment Advisor 29 Fund and Account Updates 56
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 Dividends, Capital Gains, and Taxes 31 Contacting Vanguard 58
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 Share Price 32 Glossary of Investment Terms 60
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Why Reading This Prospectus Is Important This prospectus explains the investment objective, policies, strategies, and risks associated with each Fund. To highlight terms and concepts important to mutual fund investors, we have provided Plain Talk/(R)/ explanations along the way. Reading the prospectus will help you decide whether a Fund is the right investment for you. We suggest that you keep this prospectus for future reference.

Share Class Overview

This prospectus offers the Funds' Investor Shares as well as Admiral Shares for three of the Funds. Please note that the Admiral Shares are not available for:

. SIMPLE IRAs and 403(b)(7) custodial accounts;

. Other retirement plan accounts receiving special administrative services from Vanguard; or

. Accounts maintained by financial intermediaries, except in limited circumstances.

A separate prospectus offers Signal(TM) Shares of the Funds (except the Long-Term Bond Index Fund), which are generally for Vanguard's institutional clients who invest at least $1 million and meet other eligibility requirements. Another prospectus offers Institutional Shares of the Funds (except the Short-Term Bond Index Fund). Institutional Shares are generally for investors who do not require special employee benefit plan services and who invest a minimum of $5 million for Total Bond Market Index and $25 million for the Intermediate and Long-Term Bond Index Funds. Another prospectus offers the Funds' ETF Shares (available at Vanguard's website or by calling 866-499-8473).

The Funds' separate share classes have different expenses; as a result, their investment performances will differ.

An investment in a Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Company or any other government agency.

FUND PROFILE--VANGUARD TOTAL BOND MARKET INDEX FUND

Investment Objective
The Fund seeks to track the performance of a broad, market-weighted bond index.

Primary Investment Strategies

The Fund employs a "passive management"--or indexing--investment approach designed to track the performance of the Lehman Brothers U.S. Aggregate Bond Index. This Index represents a wide spectrum of public, investment-grade, taxable, fixed income securities in the United States--including government, corporate, and international dollar-denominated bonds, as well as mortgage-backed and asset-backed securities--all with maturities of more than 1 year.

The Fund invests by sampling the Index, meaning that it holds a broadly diversified collection of securities that, in the aggregate, approximates the full Index in terms of key risk factors and other characteristics. All of the Fund's investments will be selected through the sampling process, and at least 80% of the Fund's assets will be invested in bonds held in the Index. The Fund maintains a dollar-weighted average maturity consistent with that of the Index, which generally ranges between 5 and 10 years and, as of December 31, 2007, was 7.0 years. For additional information on the Fund's investment strategies, see More on the Funds.

Primary Risks
An investment in the Fund could lose money over short or even long periods. You should expect the Fund's share price and total return to fluctuate within a wide range, like the fluctuations of the overall bond market. The Fund's performance could be hurt by:

. Interest rate risk, which is the chance that bond prices overall will decline because of rising interest rates. Interest rate risk should be moderate for the Fund because it invests mainly in short- and intermediate-term bonds, whose prices are less sensitive to interest rate changes than are the prices of long-term bonds.

. Income risk, which is the chance that the Fund's income will decline because of falling interest rates. Income risk is generally moderate for intermediate-term bond funds, so investors should expect the Fund's monthly income to fluctuate accordingly.

. Credit risk, which is the chance that a bond issuer will fail to pay interest and principal in a timely manner, or that negative perceptions of the issuer's ability to make such payments will cause the price of that bond to decline. Credit risk should be low for the Fund because it purchases only bonds that are issued by the U.S. Treasury or are of investment-grade quality.

. Call risk, which is the chance that during periods of falling interest rates, issuers of callable bonds may call (repay) securities with higher coupons or interest rates before their maturity dates. The Fund would then lose potential price appreciation and would be forced to reinvest the unanticipated proceeds at lower interest rates, resulting in a decline in the Fund's income. For mortgage-backed securities, this risk is known as prepayment risk. Call/prepayment risk should be moderate for the Fund because it invests only a portion of its assets in callable bonds and mortgage-backed securities.

. Index sampling risk, which is the chance that the securities selected for the Fund, in the aggregate, will not provide investment performance matching that of the Index. Index sampling risk for the Fund should be low.

Performance/Risk Information
The following bar chart and table are intended to help you understand the risks of investing in the Fund. The bar chart shows how the performance of the Fund's Investor Shares has varied from one calendar year to another over the periods shown. The table shows how the average annual total returns of the share classes presented compare with those of the Fund's target index. Keep in mind that the Fund's past performance (before and after taxes) does not indicate how the Fund will perform in the future.

Annual Total Returns--Investor Shares
------------------------------------------------------------
[Bar Chart Range: 40% to -20%]
1998 8.58%
1999 -0.76
2000 11.39
2001 8.43
2002 8.26
2003 3.97
2004 4.24
2005 2.40
2006 4.27
2007 6.92
------------------------------------------------------------

During the periods shown in the bar chart, the highest return for a calendar quarter was 4.29% (quarter ended September 30, 2001), and the lowest return for a quarter was -2.49% (quarter ended June 30, 2004).

Average Annual Total Returns for Periods Ended December 31, 2007
 1 Year 5 Years 10 Years
---------------------------------------------------------------------------------------------------
Vanguard Total Bond Market Index Fund Investor Shares
---------------------------------------------------------------------------------------------------
Return Before Taxes 6.92% 4.35% 5.71%
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Return After Taxes on Distributions 5.07 2.66 3.58
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Return After Taxes on Distributions and Sale of Fund Shares 4.45 2.72 3.57
---------------------------------------------------------------------------------------------------
Vanguard Total Bond Market Index Fund Admiral Shares/1/
---------------------------------------------------------------------------------------------------
Return Before Taxes 7.02% 4.44% --
---------------------------------------------------------------------------------------------------
Lehman Brothers U.S. Aggregate Bond Index
(reflects no deduction for fees, expenses, or taxes) 6.97% 4.42% 5.97%
---------------------------------------------------------------------------------------------------
1 From the inception date of the Fund's Admiral Shares on November 12, 2001,
 through December 31, 2007, the average annual total returns were 4.62% for
 the Admiral Shares and 4.90% for the Lehman Brothers U.S. Aggregate Bond
 Index.

Note on after-tax returns. Actual after-tax returns depend on your tax situation and may differ from those shown in the preceding table. When after-tax returns are calculated, it is assumed that the shareholder was in the highest federal marginal income tax bracket at the time of each distribution of income or capital gains or upon redemption. State and local income taxes are not reflected in the calculations. Please note that after-tax returns are shown only for the Investor Shares and will differ for each share class in an amount approximately equal to the difference in expense ratios. After-tax returns are not relevant for a shareholder who holds fund shares in a tax-deferred account, such as an individual retirement account or a 401(k) plan. Also, figures captioned Return After Taxes on Distributions and Sale of Fund Shares will be higher than other figures for the same period if a capital loss occurs upon redemption and results in an assumed tax deduction for the shareholder.

Fees and Expenses

The following table describes the fees and expenses you may pay if you buy and hold Investor Shares or Admiral Shares of the Fund. As is the case with all mutual funds, transaction costs incurred by the Fund for buying and selling securities are not reflected in the table. However, these costs are reflected in the investment performance figures included in this prospectus. The expenses shown under Annual Fund Operating Expenses are based on those incurred in the fiscal year ended December 31, 2007.

Shareholder Fees
(Fees paid directly from your investment)
 Investor Shares Admiral Shares
-----------------------------------------------------------------------------------------------------------------
Sales Charge (Load) Imposed on Purchases None None
-----------------------------------------------------------------------------------------------------------------
Transaction Fee on Purchases None/1/ None/1/
-----------------------------------------------------------------------------------------------------------------
Sales Charge (Load) Imposed on Reinvested Dividends None None
-----------------------------------------------------------------------------------------------------------------
Redemption Fee None/2/ None/2/
-----------------------------------------------------------------------------------------------------------------
Account Service Fee (for fund account balances below $10,000) $20/year/3/ --
-----------------------------------------------------------------------------------------------------------------


Annual Fund Operating Expenses
(Expenses deducted from the Fund's assets)
 Investor Shares Admiral Shares
-----------------------------------------------------------------------------------------------------------------
Management Expenses 0.16% 0.08%
-----------------------------------------------------------------------------------------------------------------
12b-1 Distribution Fee None None
-----------------------------------------------------------------------------------------------------------------
Other Expenses 0.03% 0.02%
-----------------------------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.19% 0.10%
-----------------------------------------------------------------------------------------------------------------
1 A portfolio transaction fee of 0.18% may apply to aggregate purchases of more
 than $500 million by a single investor.
2 A $5 fee applies to wire redemptions under $5,000.
3 If applicable, the account service fee will be collected by redeeming fund
 shares in the amount of $20.

The following examples are intended to help you compare the cost of investing in the Fund's Investor Shares or Admiral Shares with the cost of investing in other mutual funds. They illustrate the hypothetical expenses that you would incur over various periods if you invest $10,000 in the Fund's shares. These examples assume that the Shares provide a return of 5% a year and that operating expenses remain the same. The results apply whether or not you redeem your investment at the end of the given period.

 1 Year 3 Years 5 Years 10 Years
----------------------------------------------------------
Investor Shares $19 $61 $107 $243
----------------------------------------------------------
Admiral Shares 10 32 56 128
----------------------------------------------------------

These examples should not be considered to represent actual expenses or performance from the past or for the future. Actual future expenses may be higher or lower than those shown.

Additional Information
As of December 31, 2007
-----------------------------------------------------------------------------------------------
Net Assets (all share classes) $55.8 billion
-----------------------------------------------------------------------------------------------
Investment Advisor The Vanguard Group, Inc., Valley Forge, Pa., since inception
-----------------------------------------------------------------------------------------------
Dividends and Capital Gains Dividends are declared daily and distributed on the first
 business day of each month; capital gains, if any, are
 distributed annually in December.
-----------------------------------------------------------------------------------------------
Suitable for IRAs Yes
-----------------------------------------------------------------------------------------------
 Investor Shares Admiral Shares
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Inception Date December 11, 1986 November 12, 2001
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Minimum Initial Investment $3,000 $100,000
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Conversion Features May be converted to Admiral May be converted to Investor
 Shares if you meet certain Shares if you are no longer
 eligibility requirements eligible for Admiral Shares
-----------------------------------------------------------------------------------------------
Newspaper Abbreviation TotBd TotBdAdml
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Vanguard Fund Number 84 584
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CUSIP Number 921937108 921937603
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Ticker Symbol VBMFX VBTLX
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FUND PROFILE--VANGUARD SHORT-TERM BOND INDEX FUND

Investment Objective
The Fund seeks to track the performance of a market-weighted bond index with a short-term dollar-weighted average maturity.

Primary Investment Strategies

The Fund employs a "passive management"--or indexing--investment approach designed to track the performance of the Lehman Brothers 1-5 Year U.S. Government/ Credit Index. This Index includes all medium and larger issues of U.S. government, investment-grade corporate, and investment-grade international dollar-denominated bonds that have maturities between 1 and 5 years and are publicly issued.

The Fund invests by sampling the Index, meaning that it holds a range of securities that, in the aggregate, approximates the full Index in terms of key risk factors and other characteristics. All of the Fund's investments will be selected through the sampling process, and at least 80% of the Fund's assets will be invested in bonds held in the Index. The Fund maintains a dollar-weighted average maturity consistent with that of the Index, which generally does not exceed 3 years and, as of December 31, 2007, was 2.7 years. For additional information on the Fund's investment strategies, see More on the Funds.

Primary Risks
The Fund is designed for investors with a low tolerance for risk, but you could still lose money by investing in it. The Fund's performance could be hurt by:

. Interest rate risk, which is the chance that bond prices overall will decline because of rising interest rates. Interest rate risk should be low for the Fund because it invests mainly in short-term bonds, whose prices are much less sensitive to interest rate changes than are the prices of long-term bonds.

. Income risk, which is the chance that the Fund's income will decline because of falling interest rates. Income risk is generally high for short-term bond funds, so investors should expect the Fund's monthly income to fluctuate.

Annual Total Returns--Investor Shares
------------------------------------------------------------
[Bar Chart Range: 40% to -20%]
1998 7.63%
1999 2.08
2000 8.84
2001 8.88
2002 6.10
2003 3.37
2004 1.70
2005 1.31
2006 4.09
2007 7.22
------------------------------------------------------------

During the periods shown in the bar chart, the highest return for a calendar quarter was 3.89% (quarter ended September 30, 2001), and the lowest return for a quarter was -1.80% (quarter ended June 30, 2004).

Average Annual Total Returns for Periods Ended December 31, 2007
 1 Year 5 Years 10 Years
-----------------------------------------------------------------------------------------
Vanguard Short-Term Bond Index Fund Investor Shares
-----------------------------------------------------------------------------------------
Return Before Taxes 7.22% 3.52% 5.08%
-----------------------------------------------------------------------------------------
Return After Taxes on Distributions 5.52 2.16 3.21
-----------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares 4.65 2.21 3.19
-----------------------------------------------------------------------------------------
Vanguard Short-Term Bond Index Fund Admiral Shares(1)
-----------------------------------------------------------------------------------------
Return Before Taxes 7.31% 3.59% --
-----------------------------------------------------------------------------------------
Lehman Brothers 1-5 Year U.S. Government/Credit Index
(reflects no deduction for fees, expenses, or taxes) 7.27% 3.60% 5.35%
-----------------------------------------------------------------------------------------
1 From the inception of the Fund's Admiral Shares on November 12, 2001, through
 December 31, 2007, the average annual total returns were 3.74% for the
 Admiral Shares and 4.07% for the Lehman Brothers 1-5 Year U.S.
 Government/Credit Index.

Fees and Expenses

Shareholder Fees
(Fees paid directly from your investment)
 Investor Shares Admiral Shares
------------------------------------------------------------------------------------------------
Sales Charge (Load) Imposed on Purchases None None
------------------------------------------------------------------------------------------------
Transaction Fee on Purchases None(1) None(1)
------------------------------------------------------------------------------------------------
Sales Charge (Load) Imposed on Reinvested Dividends None None
------------------------------------------------------------------------------------------------
Redemption Fee None(2) None(2)
------------------------------------------------------------------------------------------------
Account Service Fee (for fund account balances below $10,000) $20/year(3) --
------------------------------------------------------------------------------------------------


Annual Fund Operating Expenses
(Expenses deducted from the Fund's assets)
 Investor Shares Admiral Shares
------------------------------------------------------------------------------------------------
Management Expenses 0.15% 0.07%
------------------------------------------------------------------------------------------------
12b-1 Distribution Fee None None
------------------------------------------------------------------------------------------------
Other Expenses 0.03% 0.03%
------------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.18% 0.10%
------------------------------------------------------------------------------------------------
1 A portfolio transaction fee of 0.15% may apply to aggregate purchases of more
 than $100 million by a single investor.
2 A $5 fee applies to wire redemptions under $5,000.
3 If applicable, the account service fee will be collected by redeeming fund
 shares in the amount of $20.

 1 Year 3 Years 5 Years 10 Years
----------------------------------------------------------
Investor Shares $18 $58 $101 $230
----------------------------------------------------------
Admiral Shares 10 32 56 128
----------------------------------------------------------

These examples should not be considered to represent actual expenses or performance from the past or for the future. Actual future expenses may be higher or lower than those shown.

Additional Information
As of December 31, 2007
------------------------------------------------------------------------------------------------
Net Assets (all share classes) $6.5 billion
------------------------------------------------------------------------------------------------
Investment Advisor The Vanguard Group, Inc., Valley Forge, Pa., since inception
------------------------------------------------------------------------------------------------
Dividends and Capital Gains Dividends are declared daily and distributed on the first
 business day of each month; capital gains, if any, are
 distributed annually in December.
------------------------------------------------------------------------------------------------
Suitable for IRAs Yes
------------------------------------------------------------------------------------------------
 Investor Shares Admiral Shares
------------------------------------------------------------------------------------------------
Inception Date March 1, 1994 November 12, 2001
------------------------------------------------------------------------------------------------
Minimum Initial Investment $3,000 $100,000
------------------------------------------------------------------------------------------------
Conversion Features May be converted to Admiral May be converted to Investor
 Shares if you meet eligibility Shares if you are no longer
 requirements eligible for Admiral Shares
------------------------------------------------------------------------------------------------
Newspaper Abbreviation STBond STBondAdml
------------------------------------------------------------------------------------------------
Vanguard Fund Number 132 5132
------------------------------------------------------------------------------------------------
CUSIP Number 921937207 921937702
------------------------------------------------------------------------------------------------
Ticker Symbol VBISX VBIRX
------------------------------------------------------------------------------------------------

FUND PROFILE--VANGUARD INTERMEDIATE-TERM BOND INDEX FUND

Investment Objective
The Fund seeks to track the performance of a market-weighted bond index with an intermediate-term dollar-weighted average maturity.

Primary Investment Strategies

The Fund employs a "passive management"--or indexing--investment approach designed to track the performance of the Lehman Brothers 5-10 Year U.S. Government/ Credit Index. This Index includes all medium and larger issues of U.S. government, investment-grade corporate, and investment-grade international dollar-denominated bonds that have maturities between 5 and 10 years and are publicly issued.

The Fund invests by sampling the Index, meaning that it holds a range of securities that, in the aggregate, approximates the full Index in terms of key risk factors and other characteristics. All of the Fund's investments will be selected through the sampling process, and at least 80% of the Fund's assets will be invested in bonds held in the Index. The Fund maintains a dollar-weighted average maturity consistent with that of the Index, which generally ranges between 5 and 10 years and, as of December 31, 2007, was 7.5 years. For additional information on the Fund's investment strategies, see More on the Funds.

. Interest rate risk, which is the chance that bond prices overall will decline because of rising interest rates. Interest rate risk should be moderate for the Fund because it invests mainly in intermediate-term bonds, whose prices are less sensitive to interest rate changes than are the prices of long-term bonds.

Annual Total Returns--Investor Shares
------------------------------------------------------------
[Bar Chart Range: 40% to -20%]
1998 10.09%
1999 -3.00
2000 12.78
2001 9.28
2002 10.85
2003 5.65
2004 5.22
2005 1.75
2006 3.91
2007 7.61
------------------------------------------------------------

During the periods shown in the bar chart, the highest return for a calendar quarter was 6.11% (quarter ended September 30, 1998), and the lowest return for a quarter was -3.88% (quarter ended June 30, 2004).

Average Annual Total Returns for Periods Ended December 31, 2007
 1 Year 5 Years 10 Years
-----------------------------------------------------------------------------------------
Vanguard Intermediate-Term Bond Index Fund Investor Shares
-----------------------------------------------------------------------------------------
Return Before Taxes 7.61% 4.81% 6.32%
-----------------------------------------------------------------------------------------
Return After Taxes on Distributions 5.78 3.00 4.08
-----------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares 4.90 3.06 4.04
-----------------------------------------------------------------------------------------
Vanguard Intermediate-Term Bond Index Fund Admiral Shares/1/
-----------------------------------------------------------------------------------------
Return Before Taxes 7.70% 4.88% --
-----------------------------------------------------------------------------------------
Lehman Brothers 5-10 Year U.S. Government/Credit Index
(reflects no deduction for fees, expenses, or taxes) 7.55% 4.87% 6.50%
-----------------------------------------------------------------------------------------
1 From the inception of the Fund's Admiral Shares on November 12, 2001, through
 December 31, 2007, the average annual total returns were 5.26% for the
 Admiral Shares and 5.54% for the Lehman Brothers 5-10 Year U.S.
 Government/Credit Index.

Fees and Expenses

Shareholder Fees
(Fees paid directly from your investment)
 Investor Shares Admiral Shares
----------------------------------------------------------------------------------------------------------
Sales Charge (Load) Imposed on Purchases None None
----------------------------------------------------------------------------------------------------------
Transaction Fee on Purchases None/1/ None/1/
----------------------------------------------------------------------------------------------------------
Sales Charge (Load) Imposed on Reinvested Dividends None None
----------------------------------------------------------------------------------------------------------
Redemption Fee None/2/ None/2/
----------------------------------------------------------------------------------------------------------
Account Service Fee (for fund account balances below $10,000) $20/year/3/ --
----------------------------------------------------------------------------------------------------------


Annual Fund Operating Expenses
(Expenses deducted from the Fund's assets)
 Investor Shares Admiral Shares
----------------------------------------------------------------------------------------------------------
Management Expenses 0.15% 0.07%
----------------------------------------------------------------------------------------------------------
12b-1 Distribution Fee None None
----------------------------------------------------------------------------------------------------------
Other Expenses 0.03% 0.03%
----------------------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.18% 0.10%
----------------------------------------------------------------------------------------------------------
1 A portfolio transaction fee of 0.23% may apply to aggregate purchases of more
 than $100 million by a single investor.
2 A $5 fee applies to wire redemptions under $5,000.
3 If applicable, the account service fee will be collected by redeeming fund
 shares in the amount of $20.

 1 Year 3 Years 5 Years 10 Years
----------------------------------------------------------
Investor Shares $18 $58 $101 $230
----------------------------------------------------------
Admiral Shares 10 32 56 128
----------------------------------------------------------

These examples should not be considered to represent actual expenses or performance from the past or for the future. Actual future expenses may be higher or lower than those shown.

Additional Information
As of December 31, 2007
------------------------------------------------------------------------------------------------
Net Assets (all share classes) $7.2 billion
------------------------------------------------------------------------------------------------
Investment Advisor The Vanguard Group, Inc., Valley Forge, Pa., since inception
------------------------------------------------------------------------------------------------
Dividends and Capital Gains Dividends are declared daily and distributed on the first
 business day of each month; capital gains, if any, are
 distributed annually in December.
------------------------------------------------------------------------------------------------
Suitable for IRAs Yes
------------------------------------------------------------------------------------------------
 Investor Shares Admiral Shares
------------------------------------------------------------------------------------------------
Inception Date March 1, 1994 November 12, 2001
------------------------------------------------------------------------------------------------
Minimum Initial Investment $3,000 $100,000
------------------------------------------------------------------------------------------------
Conversion Features May be converted to Admiral May be converted to Investor
 Shares if you meet Shares if you are no longer
 eligibility eligible for Admiral Shares
 requiremen
 ts
------------------------------------------------------------------------------------------------
Newspaper Abbreviation ITBond ITBondAdml
------------------------------------------------------------------------------------------------
Vanguard Fund Number 314 5314
------------------------------------------------------------------------------------------------
CUSIP Number 921937306 921937801
------------------------------------------------------------------------------------------------
Ticker Symbol VBIIX VBILX
------------------------------------------------------------------------------------------------

FUND PROFILE--VANGUARD LONG-TERM BOND INDEX FUND

Investment Objective
The Fund seeks to track the performance of a market-weighted bond index with a long-term dollar-weighted average maturity.

Primary Investment Strategies

The Fund employs a "passive management"--or indexing--investment approach designed to track the performance of the Lehman Brothers U.S. Long Government/ Credit Index. This Index includes all medium and larger issues of U.S. government, investment-grade corporate, and investment-grade international dollar-denominated bonds that have maturities of greater than 10 years and are publicly issued.

December 31, 2007, was 20.6 years. For additional information on the Fund's investment strategies, see More on the Funds.

. Interest rate risk, which is the chance that bond prices overall will decline because of rising interest rates. Interest rate risk should be high for the Fund because it invests mainly in long-term bonds, whose prices are much more sensitive to interest rate changes than are the prices of short-term bonds.

. Income risk, which is the chance that the Fund's income will decline because of falling interest rates. Income risk is generally low for long-term bond funds.

Performance/Risk Information
The following bar chart and table are intended to help you understand the risks of investing in the Fund. The bar chart shows how the performance of the Fund's Investor Shares has varied from one calendar year to another over the periods shown. The table shows how the average annual total returns compare with those of the Fund's target index. Keep in mind that the Fund's past performance (before and after taxes) does not indicate how the Fund will perform in the future.

Annual Total Returns--Investor Shares
------------------------------------------------------------
[Bar Chart Range: 40% to -20%]
1998 11.98%
1999 -7.85
2000 16.64
2001 8.17
2002 14.35
2003 5.50
2004 8.40
2005 5.32
2006 2.67
2007 6.59
------------------------------------------------------------

During the periods shown in the bar chart, the highest return for a calendar quarter was 9.44% (quarter ended September 30, 2002), and the lowest return for a quarter was -5.25% (quarter ended June 30, 2004).

Average Annual Total Returns for Periods Ended December 31, 2007
 1 Year 5 Years 10 Years
-----------------------------------------------------------------------------------------
Vanguard Long-Term Bond Index Fund Investor Shares
-----------------------------------------------------------------------------------------
Return Before Taxes 6.59% 5.68% 6.97%
-----------------------------------------------------------------------------------------
Return After Taxes on Distributions 4.62 3.68 4.65
-----------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares 4.23 3.68 4.54
-----------------------------------------------------------------------------------------
Lehman Brothers U.S. Long Government/Credit Index
(reflects no deduction for fees, expenses, or taxes) 6.60% 5.80% 6.95%
-----------------------------------------------------------------------------------------

Note on after-tax returns. Actual after-tax returns depend on your tax situation and may differ from those shown in the preceding table. When after-tax returns are calculated, it is assumed that the shareholder was in the highest federal marginal income tax bracket at the time of each distribution of income or capital gains or upon redemption. State and local income taxes are not reflected in the calculations. Please note that after-tax returns will differ for each share class in an amount approximately equal to the difference in expense ratios. After-tax returns are not relevant for a shareholder who holds fund shares in a tax-deferred account, such as an individual retirement account or a 401(k) plan. Also, figures captioned Return After Taxes on Distributions and Sale of Fund Shares will be higher than other figures for the same period if a capital loss occurs upon redemption and results in an assumed tax deduction for the shareholder.

Fees and Expenses

The following table describes the fees and expenses you may pay if you buy and hold Investor Shares of the Fund. As is the case with all mutual funds, transaction costs incurred by the Fund for buying and selling securities are not reflected in the table. However, these costs are reflected in the investment performance figures included in this prospectus. The expenses shown under Annual Fund Operating Expenses are based on those incurred in the fiscal year ended December 31, 2007.

Shareholder Fees
(Fees paid directly from your investment)
------------------------------------------------------------------------------
Sales Charge (Load) Imposed on Purchases None
------------------------------------------------------------------------------
Transaction Fee on Purchases None/1/
------------------------------------------------------------------------------
Sales Charge (Load) Imposed on Reinvested Dividends None
------------------------------------------------------------------------------
Redemption Fee None/2/
------------------------------------------------------------------------------
Account Service Fee (for fund account balances below $10,000) $20/year/3/
------------------------------------------------------------------------------


Annual Fund Operating Expenses
(Expenses deducted from the Fund's assets)
------------------------------------------------------------------------------
Management Expenses 0.15%
------------------------------------------------------------------------------
12b-1 Distribution Fee None
------------------------------------------------------------------------------
Other Expenses 0.03%
------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.18%
------------------------------------------------------------------------------
1 A portfolio transaction fee of 0.21% may apply to aggregate purchases of more
 than $100 million by a single investor.
2 A $5 fee applies to wire redemptions under $5,000.
3 If applicable, the account service fee will be collected by redeeming fund
 shares in the amount of $20.

The following example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. It illustrates the hypothetical expenses that you would incur over various periods if you invest $10,000 in the Fund's shares. This example assumes that the Fund provides a return of 5% a year and that operating expenses remain the same. The results apply whether or not you redeem your investment at the end of the given period.

1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------
$18 $58 $101 $230
--------------------------------------------------------

This example should not be considered to represent actual expenses or performance from the past or for the future. Actual future expenses may be higher or lower than those shown.

Additional Information
As of December 31, 2007
--------------------------------------------------------------------------------------------
Net Assets $2.8 billion
--------------------------------------------------------------------------------------------
Investment Advisor The Vanguard Group, Inc., Valley Forge, Pa., since inception
--------------------------------------------------------------------------------------------
Dividends and Capital Gains Dividends are declared daily and distributed on the first
 business day of each month; capital gains, if any, are
 distributed annually in December.
--------------------------------------------------------------------------------------------
Inception Date March 1, 1994
--------------------------------------------------------------------------------------------
Suitable for IRAs Yes
--------------------------------------------------------------------------------------------
Minimum Initial Investment $3,000
--------------------------------------------------------------------------------------------
Newspaper Abbreviation LTBond
--------------------------------------------------------------------------------------------
Vanguard Fund Number 522
--------------------------------------------------------------------------------------------
CUSIP Number 921937405
--------------------------------------------------------------------------------------------
Ticker Symbol VBLTX
--------------------------------------------------------------------------------------------

INVESTING IN INDEX FUNDS

What Is Indexing?
Indexing is an investment strategy for tracking the performance of a specified market benchmark, or "index." An index is an unmanaged group of securities whose overall performance is used as a standard to measure the investment performance of a particular market. There are many types of indexes. Some represent entire markets--such as the U.S. stock market or the U.S. bond market. Other indexes cover market segments--such as small-capitalization stocks or short-term bonds.

An index fund holds all, or a representative sample, of the securities that make up its target index. Index funds attempt to mirror the performance of the target index, for better or worse. However, an index fund does not always perform exactly like its target index. For example, like all mutual funds, index funds have operating expenses and transaction costs. Market indexes do not, and therefore will usually have a slight performance advantage over funds that track them.

Index funds typically have the following characteristics:

. Variety of investments. Most Vanguard index funds generally invest in the securities of a wide variety of companies and industries.

. Relative performance consistency. Because they seek to track market benchmarks, index funds usually do not perform dramatically better or worse than their benchmarks.

. Low cost. Index funds are inexpensive to run compared with actively managed funds. They have low or no research costs and typically keep trading activity--and thus dealer markups and other transaction costs--to a minimum.

MORE ON THE FUNDS

This prospectus describes the primary risks you would face as a Fund shareholder. It is important to keep in mind one of the main axioms of investing: The higher the risk of losing money, the higher the potential reward. The reverse, also, is generally true: The lower the risk, the lower the potential reward. As you consider an investment in any mutual fund, you should take into account your personal tolerance for fluctuations in the securities markets. Look for this [FLAG] symbol throughout the prospectus. It is used to mark detailed information about the more significant risks that you would confront as a Fund shareholder.

The following sections explain the primary investment strategies and policies that each Fund uses in pursuit of its objective. The Fund's board of trustees, which oversees the Fund's management, may change investment strategies or policies in the interest of shareholders without a shareholder vote, unless those strategies or policies are designated as fundamental. Each Fund's policy of investing at least 80% of its assets in bonds that are part of the target index may be changed only upon
60 days' notice to shareholders.

Market Exposure

[FLAG]
Each Fund is subject to interest rate risk, which is the chance that bond prices overall will decline because of rising interest rates. Interest rate risk should be low for short-term bond funds, moderate for intermediate-term bond funds, and high for long-term bond funds.

Although bonds are often thought to be less risky than stocks, there have been periods when bond prices have fallen significantly because of rising interest rates. For instance, prices of long-term bonds fell by almost 48% between December 1976 and September 1981.

To illustrate the relationship between bond prices and interest rates, the following table shows the effect of a 1% and a 2% change (both up and down) in interest rates on the values of three noncallable bonds of different maturities, each with a face value of $1,000.

How Interest Rate Changes Affect the Value of a $1,000 Bond/1/
 After a 1% After a 1% After a 2% After a 2%
Type of Bond (Maturity) Increase Decrease Increase Decrease
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Short-Term (2.5 years) $977 $1,024 $955 $1,048
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Intermediate-Term (10 years) 926 1,082 858 1,172
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Long-Term (20 years) 884 1,137 786 1,299
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1 Assuming a 5% coupon.

These figures are for illustration only; you should not regard them as an indication of future performance of the bond market as a whole or the Funds in particular.

Plain Talk About Bonds and Interest Rates

As a rule, when interest rates rise, bond prices fall. The opposite is also true: Bond prices go up when interest rates fall. Why do bond prices and interest rates move in opposite directions? Let's assume that you hold a bond offering a 5% yield. A year later, interest rates are on the rise and bonds of comparable quality and maturity are offered with a 6% yield. With higher-yielding bonds available, you would have trouble selling your 5% bond for the price you paid--you would probably have to lower your asking price. On the other hand, if interest rates were falling and 4% bonds were being offered, you should be able to sell your 5% bond for more than you paid.

How mortgage-backed securities are different: In general, declining interest rates will not lift the prices of mortgage-backed securities--such as GNMAs--as much as the prices of comparable bonds. Why? Because when interest rates fall, the bond market tends to discount the prices of mortgage-backed securities for prepayment risk--the possibility that homeowners will refinance their mortgages at lower rates and cause the bonds to be paid off prior to maturity. In part to compensate for this prepayment possibility, mortgage-backed securities tend to offer higher yields than other bonds of comparable credit quality and maturity.

Changes in interest rates can affect bond income as well as bond prices.

[FLAG]
Each Fund is subject to income risk, which is the chance that the Fund's income will decline because of falling interest rates. A fund's income declines when interest rates fall because the fund then must invest in lower-yielding bonds. Income risk is generally higher for short-term bond funds and lower for long-term bond funds.

Plain Talk About Bond Maturities

A bond is issued with a specific maturity date--the date when the issuer must pay back the bond's principal (face value). Bond maturities range from less than 1 year to more than 30 years. Typically, the longer a bond's maturity, the more price risk you, as a bond investor, face as interest rates rise--but also the higher yield you could receive. Longer-term bonds are more suitable for investors willing to take a greater risk of price fluctuations to get higher and more stable interest income. Shorter-term bond investors should be willing to accept lower yields and greater income variability in return for less fluctuation in the value of their investment.

Although falling interest rates tend to strengthen bond prices, they can cause other sorts of problems for bond fund investors--bond calls and prepayments.

[FLAG]
The Total Bond Market Index Fund is subject to call risk, which is the chance that during periods of falling interest rates, issuers of callable bonds may call (repay) securities with higher coupons or interest rates before their maturity dates. The Fund would then lose potential price appreciation and would be forced to reinvest the unanticipated proceeds at lower interest rates, resulting in a decline in the Fund's income. For mortgage-backed securities, this risk is known as prepayment risk.

Because the Total Bond Market Index Fund invests only a portion of its assets in callable bonds and mortgage-backed securities, call/prepayment risk for the Fund should be moderate.

[FLAG]
Each Fund is subject to credit risk, which is the chance that a bond issuer will fail to pay interest and principal in a timely manner, or that negative perceptions of the issuer's ability to make such payments will cause the price of that bond to decline.

Plain Talk About Credit Quality

A bond's credit-quality rating is an assessment of the issuer's ability to pay interest on the bond and, ultimately, to repay the principal. Credit quality is evaluated by one of the independent bond-rating agencies (for example, Moody's or Standard & Poor's) or through independent analysis conducted by a fund's advisor. The lower the rating, the greater the chance--in the rating agency's or advisor's opinion--that the bond issuer will default, or fail to meet its payment obligations. All things being equal, the lower a bond's credit rating, the higher its yield should be to compensate investors for assuming additional risk. Investment-grade bonds are those rated in one of the four highest ratings categories. A fund may treat an unrated bond as investment-grade if warranted by the advisor's analysis.

The credit quality of each Fund is expected to be very high, and thus credit risk should be low. The following table shows the dollar-weighted average credit quality of each Fund's holdings and that of its target index, as rated by Moody's Investors Service, Inc., as of December 31, 2007.

 Average Credit Quality
Fund Fund's Holdings Target Index
---------------------------------------------------------------
Total Bond Market Index Aa1 Aa1
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Short-Term Bond Index Aa1 Aa1
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Intermediate-Term Bond Index Aa2 Aa2
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Long-Term Bond Index Aa2 Aa2
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[FLAG]
Each Fund is subject to index sampling risk, which is the chance that the securities selected for a Fund, in the aggregate, will not provide investment performance matching that of its Index. Index sampling risk for each Fund should be low.

To a limited extent, the Funds are also exposed to event risk, which is the chance that corporate fixed income securities held by a Fund may suffer a substantial decline in credit quality and market value because of a corporate restructuring or another corporate event.

The Funds are generally managed without regard to tax ramifications.

The following summary table is provided to help you distinguish among the Funds and their various risks.

 Risks of the Funds
 Interest Call/ Index
 Income Rate Prepayment Credit Sampling
Fund Risk Risk Risk Risk Risk
-------------------------------------------------------------------------------
Total Bond Market Index Moderate Moderate Moderate Low Low
-------------------------------------------------------------------------------
Short-Term Bond Index High Low Low Low Low
-------------------------------------------------------------------------------
Intermediate-Term Bond Moderate Moderate Low Low Low
Index
-------------------------------------------------------------------------------
Long-Term Bond Index Low High Low Low Low
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Security Selection

hold all issues in their target indexes, some of the issues (and issuers) that are held will likely be overweighted (or underweighted) compared with the target indexes. The maximum overweight (or underweight) is constrained at the issuer level with the goal of producing well-diversified credit exposure in the portfolio.

The following table shows the number of bonds held by each Fund, as well as the number of bonds in each Fund's target index, as of December 31, 2007.

 Number of Number of Bonds in
Fund Bonds Held Target Index
-------------------------------------------------------------------
Total Bond Market Index 3,157 9,193
-------------------------------------------------------------------
Short-Term Bond Index 816 1,821
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Intermediate-Term Bond Index 920 1,424
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Long-Term Bond Index 777 1,083
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Types of bonds. The Total Bond Market Index Fund tracks the Lehman Brothers U.S. Aggregate Bond Index; the Short-, Intermediate-, and Long-Term Bond Funds track subsets of that Index. Lehman Brothers U.S. Aggregate Bond Index measures the total universe of taxable investment-grade fixed income securities in the United States--including government, corporate, and international dollar-denominated bonds, as well as mortgage-backed and asset-backed securities--all with maturities of more than 1 year.

As of December 31, 2007, each Fund was composed of the following types of bonds:

 International
 U.S. Mortgage- Dollar- Short-Term
Fund Government Corporate Backed Denominated Reserves Total
---------------------------------------------------------------------------------------------------
Total Bond Market Index 34% 25% 38% 2% 1% 100%
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Short-Term Bond Index 68 27 0 5 0 100
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Intermediate-Term
Bond Index 52 41 0 6 1 100
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Long-Term Bond Index 49 46 0 5 0 100
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An explanation of each type of bond follows.

. U.S. government and agency bonds represent loans by investors to the U.S. Treasury Department or a wide variety of government agencies and instrumentalities. Securities issued by most U.S. government entities are neither guaranteed by the U.S. Treasury nor backed by the full faith and credit of the U.S. government. These entities include, among others, the Federal Home Loan Banks (FHLBs), the Federal National Mortgage Association (FNMA), and the Federal Home Loan Mortgage Corporation (FHLMC). Securities issued by the U.S. Treasury and a small number of

U.S. government agencies, such as the Government National Mortgage Association (GNMA), are backed by the full faith and credit of the U.S. government.

. Corporate bonds are IOUs issued by businesses that want to borrow money for some purpose--often to develop a new product or service, to expand into a new market, or to buy another company. As with other types of bonds, the issuer promises to repay the principal on a specific date and to make interest payments in the meantime. The amount of interest offered depends both on market conditions and on the financial health of the corporation issuing the bonds; a company whose credit rating is not strong will have to offer a higher interest rate to obtain buyers for its bonds. For purposes of the preceding table, corporate bonds include securities that are backed by a pool of underlying assets (asset-backed securities) or commercial mortgages (commercial mortgage-backed bonds). Each Fund expects to purchase only investment-grade corporate bonds.

. Mortgage-backed securities represent interests in underlying pools of mortgages. Unlike ordinary bonds, which generally pay a fixed rate of interest at regular intervals and then repay principal upon maturity, mortgage-backed securities pass through both interest and principal from underlying mortgages as part of their regular payments. Because the mortgages underlying the securities can be prepaid at any time by homeowners or by corporate borrowers, mortgage-backed securities are subject to prepayment risk. These types of securities are issued by a number of government agencies, including the GNMA, the FHLMC, and the FNMA.

The Total Bond Market Index Fund may also invest in conventional mortgage-backed securities--which are packaged by private corporations and are not guaranteed by the U.S. government--and enter into mortgage-dollar-roll transactions. In a mortgage-dollar-roll transaction, the Fund sells mortgage-backed securities to a dealer and simultaneously agrees to purchase similar securities in the future at a predetermined price. These transactions simulate an investment in mortgage-backed securities and have the potential to enhance the Fund's returns and reduce its administrative burdens, compared with holding mortgage-backed securities directly. These transactions may increase the Fund's portfolio turnover rate. Mortgage dollar rolls will be used only to the extent that they are consistent with the Fund's investment objective and risk profile.

. International dollar-denominated bonds are bonds denominated in U.S. dollars and issued by foreign governments and companies. To the extent that a Fund owns foreign bonds, it is subject to country risk, which is the chance that world events--such as political upheaval, financial troubles, or natural disasters--will adversely affect the value of securities issued by companies in foreign countries. In addition, the prices of foreign stocks and the prices of U.S. stocks have, at times, moved in opposite directions. Because the bond's value is designated in dollars rather than in the currency of the issuer's country, the investor is not exposed to currency risk; rather, the issuer assumes the risk, usually to attract U.S. investors.

Plain Talk About U.S. Government-Sponsored Entities

A variety of U.S. government-sponsored entities (GSEs), such as the Federal Home Loan Mortgage Corporation (FHLMC), the Federal National Mortgage Association (FNMA), and the Federal Home Loan Banks (FHLBs), issue debt and mortgage-backed securities. Although GSEs may be chartered or sponsored by acts of Congress, they are not funded by congressional appropriations. Generally, their securities are neither issued by nor guaranteed by the U.S. Treasury and are not backed by the full faith and credit of the U.S. government. In most cases, these securities are supported only by the credit of the GSE, standing alone. In some cases, a GSE's securities may be supported by the ability of the GSE to borrow from the Treasury, or may be supported by the U.S. government in some other way. Securities issued by the Government National Mortgage Association (GNMA), however, are backed by the full faith and credit of the U.S. government.

Other Investment Policies and Risks
Each Fund will invest at least 80% of its assets in bonds held in its target index. Up to 20% of each Fund's assets may be used to purchase nonpublic, investment-grade securities, generally referred to as 144A securities, as well as smaller public issues or medium-term notes not included in the index because of the small size of the issue. The vast majority of these securities will have characteristics and risks similar to those in the target indexes. Subject to the same 20% limit, the Funds may also purchase other investments that are outside of their target indexes or may hold bonds that, when acquired, were included in the index but subsequently were removed. The Funds may also invest in relatively conservative classes of collateralized mortgage obligations (CMOs), which offer a high degree of cash-flow predictability and a low level of vulnerability to mortgage prepayment risk. To reduce credit risk, these less-risky classes of CMOs are purchased only if they are issued by agencies of the U.S. government or issued by private companies that carry high-quality investment-grade ratings.

Each Fund reserves the right to substitute a different index for the index it currently tracks if the current index is discontinued, if the Fund's agreement with the sponsor of its target index is terminated, or for any other reason determined in good faith by the Fund's board of trustees. In any such instance, the substitute index would measure the same market segment as the current index.

[FLAG]
Each Fund may invest in derivatives. In general, derivatives may involve risks different from, and possibly greater than, those of the underlying securities, assets, or market indexes.

Generally speaking, a derivative is a financial contract whose value is based on the value of a financial asset (such as a stock, bond, or currency), a physical asset (such as

gold), or a market index (such as the S&P 500 Index). The Funds may invest in derivatives only if the expected risks and rewards of the derivatives are consistent with the investment objective, policies, strategies, and risks of the Fund as disclosed in this prospectus. The advisor will not use derivatives to change the risks of the Fund as a whole as such risks are disclosed in this prospectus. In particular, derivatives will be used only where they may help the advisor:

. Invest in eligible asset classes with greater efficiency and lower cost than is possible through direct investment;

. Add value when these instruments are attractively priced; or

. Adjust sensitivity to changes in interest rates.

The Funds' derivative investments may include fixed income futures contracts, fixed income options, interest rate swaps, total return swaps, credit default swaps, or other derivatives. Losses (or gains) involving futures contracts can sometimes be substantial--in part because a relatively small price movement in a futures contract may result in an immediate and substantial loss (or gain) for a fund. Similar risks exist for other types of derivatives.

Plain Talk About Derivatives

Derivatives can take many forms. Some forms of derivatives, such as exchange-traded futures and options on securities, commodities, or indexes, have been trading on regulated exchanges for decades. These types of derivatives are standardized contracts that can easily be bought and sold, and whose market values are determined and published daily. Nonstandardized derivatives (such as swap agreements), on the other hand, tend to be more specialized or complex, and may be harder to value.

Vanguard may invest a small portion of each Fund's assets in shares of bond exchange-traded funds (ETFs). ETFs provide returns similar to those of the bonds listed in the index or in a subset of the index. Vanguard may purchase ETFs when doing so will reduce the Fund's transaction costs or add value because the instruments are favorably priced. Vanguard receives no additional revenue from investing Fund assets in Vanguard bond ETFs because Fund assets invested in ETF Shares are excluded when allocating to the Fund its share of the costs of Vanguard operations.

Cash Management

Each Fund's daily cash balance may be invested in one or more Vanguard CMT Funds, which are very low-cost money market funds. When investing in a Vanguard CMT Fund, each Fund bears its proportionate share of the at-cost expenses of the CMT Fund in which it invests.

Temporary Investment Measures
Each Fund may temporarily depart from its normal investment policies and strategies when doing so is believed to be in the Fund's best interest, so long as the alternative is consistent with the Fund's investment objective. For instance, the Fund may invest beyond the normal limits in derivatives or ETFs that are consistent with the Fund's objective when those instruments are more favorably priced or provide needed liquidity, as might be the case when the Fund receives large cash flows that it cannot prudently invest immediately.

Frequent Trading or Market-Timing

Background. Some investors try to profit from strategies involving frequent trading of mutual fund shares, such as market-timing. For funds holding foreign securities, investors may try to take advantage of an anticipated difference between the price of the fund's shares and price movements in overseas markets, a practice also known as time-zone arbitrage. Investors also may try to engage in frequent trading of funds holding investments such as small-cap stocks and high-yield bonds. As money is shifted into and out of a fund by a shareholder engaging in frequent trading, a fund incurs costs for buying and selling securities, resulting in increased brokerage and administrative costs. These costs are borne by all fund shareholders, including the long-term investors who do not generate the costs. In addition, frequent trading may interfere with an advisor's ability to efficiently manage the fund.

Policies to Address Frequent Trading. The Vanguard funds (other than money market funds, short-term bond funds, and Vanguard ETF(TM) Shares) do not knowingly accommodate frequent trading. The board of trustees of each Vanguard fund has adopted policies and procedures reasonably designed to detect and discourage frequent trading and, in some cases, to compensate the fund for the costs associated with it. Although there is no assurance that Vanguard will be able to detect or prevent frequent trading or market-timing in all circumstances, the following policies have been adopted to address these issues:

. Each Vanguard fund reserves the right to reject any purchase request--including exchanges from other Vanguard funds--without notice and regardless of size. For example, a purchase request could be rejected if Vanguard determines that such purchase may negatively affect a fund's operation or performance or because of a history of frequent trading by the investor.

. Each Vanguard fund (other than money market funds, short-term bond funds, and ETF Shares) generally prohibits, except as otherwise noted in the Investing With Vanguard section, an investor's purchases or exchanges into a fund account for 60 calendar days after the investor has redeemed or exchanged out of that fund account.

. Certain Vanguard funds charge shareholders purchase and/or redemption fees on transactions.

See the Investing With Vanguard section of this prospectus for further details on Vanguard's transaction policies.

Each fund (other than money market funds), in determining its net asset value, will, when appropriate, use fair-value pricing, as described in the Share Price section. Fair-value pricing may reduce or eliminate the profitability of certain frequent-trading strategies.

Do not invest with Vanguard if you are a market-timer.

Plain Talk About Costs of Investing

Costs are an important consideration in choosing a mutual fund. That's because you, as a shareholder, pay the costs of operating a fund, plus any transaction costs incurred when the fund buys or sells securities. These costs can erode a substantial portion of the gross income or the capital appreciation a fund achieves. Even seemingly small differences in expenses can, over time, have a dramatic effect on a fund's performance.

Turnover Rate

Although the Funds normally seek to invest for the long term, each Fund may sell securities regardless of how long they have been held. The Financial Highlights section of this prospectus shows historical turnover rates for the Funds. A turnover rate of 100%, for example, would mean that a Fund had sold and replaced securities valued at 100% of its net assets within a one-year period. Shorter-term bonds will mature or be sold--and need to be replaced--more frequently than longer-term bonds. As a result, shorter-term bond funds tend to have higher turnover rates than longer-term bond funds. The average turnover rate for bond funds was approximately 111%; for indexed bond funds, the average turnover rate was approximately 82%, both as reported by Morningstar, Inc., on December 31, 2007.

Plain Talk About Turnover Rate
Before investing in a mutual fund, you should review its turnover rate. This gives an indication of how transaction costs, which are not included in the fund's expense ratio, could affect the fund's future returns. In general, the greater the volume of buying and selling by the fund, the greater the impact that dealer markups and other transaction costs will have on its return. Also, funds with high turnover rates may be more likely to generate capital gains that must be distributed to shareholders as taxable income.

THE FUNDS AND VANGUARD

Each Fund is a member of The Vanguard Group, a family of 37 investment companies with more than 150 funds holding assets in excess of $1.2 trillion. All of the funds that are members of The Vanguard Group share in the expenses associated with administrative services and business operations, such as personnel, office space, equipment, and advertising.

Vanguard also provides marketing services to the funds. Although shareholders do not pay sales commissions or 12b-1 distribution fees, each fund (or in the case of a fund with multiple share classes, each share class of the fund) pays its allocated share of The Vanguard Group's marketing costs.

Plain Talk About Vanguard's Unique Corporate Structure

The Vanguard Group is truly a mutual mutual fund company. It is owned jointly by the funds it oversees and thus indirectly by the shareholders in those funds. Most other mutual funds are operated by management companies that may be owned by one person, by a group of individuals, or by investors who own the management company's stock. The management fees charged by these companies include a profit component over and above the companies' cost of providing services. By contrast, Vanguard provides services to its member funds on an at-cost basis, with no profit component, which helps to keep the funds' expenses low.

INVESTMENT ADVISOR

The Vanguard Group, Inc. (Vanguard), P.O. Box 2600, Valley Forge, PA 19482, which began operations in 1975, serves as advisor to the Funds through its Fixed Income Group. As of December 31, 2007, Vanguard served as advisor for approximately $1 trillion in assets. Vanguard manages the Funds on an at-cost basis, subject to the supervision and oversight of the trustees and officers of the Funds.

For the fiscal year ended December 31, 2007, the advisory expenses represented an effective annual rate of 0.01% of each Fund's average net assets.

For a discussion of why the board of trustees approved each Fund's investment advisory arrangement, see the most recent semiannual report to shareholders covering the fiscal period ended June 30.

funds, index bond funds, stable value portfolios, and money market funds. Since joining Vanguard in 1987, Mr. Sauter has been a key contributor to the development of Vanguard's stock indexing and active quantitative equity investment strategies. He received his A.B. in Economics from Dartmouth College and an M.B.A. in Finance from the University of Chicago.

Robert F. Auwaerter is head of Vanguard's Fixed Income Group and Principal of Vanguard. He has direct oversight responsibility for all money market funds, bond funds, and stable value portfolios managed by the Fixed Income Group. He has managed investment portfolios since 1978 and has been with Vanguard since 1981. He received his B.S. in Finance from The Wharton School of the University of Pennsylvania and an M.B.A. from Northwestern University.

Plain Talk About the Funds' Portfolio Managers

The managers primarily responsible for the day-to-day management of the Funds are:

Kenneth E. Volpert, CFA, Principal of Vanguard and head of Vanguard's Taxable Bond Group. He has managed investment portfolios since 1982; has been with Vanguard since 1992; managed the Total Bond Market Index Fund since 1992 (co-managed since 2008); managed the Intermediate-Term Bond Index Fund since its inception (co-managed since 2008); and managed the Long-Term Bond Index Fund since 2005 (co-managed since 2008). Education: B.S., University of Illinois; M.B.A., University of Chicago.

Gregory Davis, CFA, Principal of Vanguard and head of Vanguard's Bond Index Group. He has worked in investment management for Vanguard since 1999; has managed investment portfolios since 2000; has managed the Short-Term Bond Index Fund since 2005; and has co-managed the Total Bond Market Index and Long-Term Bond Index Funds since 2008. Education: B.S., The Pennsylvania State University; M.B.A., The Wharton School of the University of Pennsylvania.

Joshua C. Barrickman, CFA, Portfolio Manager for Vanguard. He has been with Vanguard since 1998; has worked in investment management since 1999; has managed investment portfolios since 2005; and has co-managed the Intermediate-Term Bond Index Fund since 2008. Education: B.S., Ohio Northern University; M.B.A., Lehigh University.

The Statement of Additional Information provides information about each portfolio manager's compensation, other accounts under management, and ownership of securities in the Funds.

DIVIDENDS, CAPITAL GAINS, AND TAXES

Fund Distributions
Each Fund distributes to shareholders virtually all of its net income (interest less expenses) as well as any net capital gains realized from the sale of its holdings. The Fund's income dividends accrue daily and are distributed on the first business day of every month; capital gains distributions generally occur annually in December. In addition, the Funds may occasionally be required to make supplemental distributions at some other time during the year. You can receive distributions of income or capital gains in cash, or you can have them automatically reinvested in more shares of the Fund.

Plain Talk About Distributions

As a shareholder, you are entitled to your portion of a fund's income from interest as well as gains from the sale of investments. Income consists of interest the fund earns from its money market and bond investments. Capital gains are realized whenever the fund sells securities for higher prices than it paid for them. These capital gains are either short-term or long-term, depending on whether the fund held the securities for one year or less or for more than one year. You receive the fund's earnings as either a dividend or capital gains distribution.

Basic Tax Points
Vanguard will send you a statement each year showing the tax status of all your distributions. In addition, investors in taxable accounts should be aware of the following basic tax points:

. Distributions are taxable to you for federal income tax purposes, whether or not you reinvest these amounts in additional Fund shares.

. Distributions declared in December--if paid to you by the end of January--are taxable for federal income tax purposes as if received in December.

. Any dividend and short-term capital gains distributions that you receive are taxable to you as ordinary income for federal income tax purposes.

. Any distributions of net long-term capital gains are taxable to you as long-term capital gains for federal income tax purposes, no matter how long you've owned shares in the Fund.

. Capital gains distributions may vary considerably from year to year as a result of the Funds' normal investment activities and cash flows.

. A sale or exchange of Fund shares is a taxable event. This means that you may have a capital gain to report as income, or a capital loss to report as a deduction, when you complete your federal income tax return.

. Dividend and capital gains distributions that you receive, as well as your gains or losses from any sale or exchange of Fund shares, may be subject to state and local income taxes. Depending on your state's rules, however, any dividends attributable to interest earned on direct obligations of the U.S. government may be exempt from state and local taxes. Vanguard will notify you each year how much, if any, of your dividends may qualify for this exemption.

General Information

Backup withholding. By law, Vanguard must withhold 28% of any taxable distributions or redemptions from your account if you do not:

. Provide us with your correct taxpayer identification number;

. Certify that the taxpayer identification number is correct; and

. Confirm that you are not subject to backup withholding.

Similarly, Vanguard must withhold taxes from your account if the IRS instructs us to do so.

Foreign investors. Vanguard funds generally are not sold outside the United States, except to certain qualified investors. If you reside outside the United States, please consult our website at www.vanguard.com and review "Non-U.S. investors." Foreign investors should be aware that U.S. withholding and estate taxes may apply to any investments in Vanguard funds.

Invalid addresses. If a dividend or capital gains distribution check mailed to your address of record is returned as undeliverable, Vanguard will automatically reinvest all future distributions until you provide us with a valid mailing address.

Tax consequences. This prospectus provides general tax information only. If you are investing through a tax-deferred retirement account, such as an IRA, special tax rules apply. Please consult your tax advisor for detailed information about a fund's tax consequences for you.

SHARE PRICE

Each Fund's share price, called its net asset value, or NAV, is calculated each business day as of the close of regular trading on the New York Stock Exchange, generally 4 p.m., Eastern time. Each share class has its own NAV, which is computed by dividing the net assets allocated to each share class by the number of Fund shares outstanding for that class. On holidays or other days when the Exchange is closed, the NAV is not calculated, and the Fund does not transact purchase or redemption requests.

Debt securities held by a Vanguard fund are valued based on information furnished by an independent pricing service or market quotations. Certain short-term debt instruments used to manage a fund's cash are valued on the basis of amortized cost. The values of any mutual fund shares held by a fund are based on the NAVs of the shares. The values of any ETF or closed-end fund shares held by a fund are based on the market value of the shares.

When pricing-service information or reliable market quotations are not readily available, securities are priced at their fair value (the amount that the owner might reasonably expect to receive upon the current sale of a security). A fund also may use fair-value pricing (1) on bond market holidays when the fund is open for business (such as Columbus Day and Veterans Day), or (2) if the value of a security it holds has been materially affected by events occurring before the fund's pricing time but after 3 p.m., Eastern time (per industry standard, pricing services base bond prices on the 3 p.m. yield curve).

Fair-value prices are determined by Vanguard according to procedures adopted by the board of trustees. When fair-value pricing is employed, the prices of securities used by a fund to calculate its NAV may differ from quoted or published prices for the same securities.

Vanguard fund share prices can be found daily in the mutual fund listings of most major newspapers under various "Vanguard" headings.

FINANCIAL HIGHLIGHTS

The following financial highlights tables are intended to help you understand each Fund's financial performance for the periods shown, and certain information reflects financial results for a single Fund share. The total returns in each table represent the rate that an investor would have earned or lost each period on an investment in the Fund (assuming reinvestment of all distributions). This information has been derived from the financial statements audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, whose report--along with each Fund's financial statements--is included in the Funds' most recent annual report to shareholders. To receive a free copy of the latest annual or semiannual report, you may access a report online at www.vanguard.com, or you may contact Vanguard by telephone or by mail.

Plain Talk About How to Read the Financial Highlights Tables

This explanation uses the Total Bond Market Index Fund's Investor Shares as an example. The Investor Shares began fiscal year 2007 with a net asset value
(price) of $9.99 per share. During the year, each Investor Share earned $0.501 from investment income (interest) and $0.17 from investments that had appreciated in value or that were sold for higher prices than the Fund paid for them.

Shareholders received $0.501 per share in the form of dividend distributions. A portion of each year's distributions may come from the prior year's income or capital gains.

The share price at the end of the year was $10.16, reflecting earnings of $0.671 per share and distributions of $0.501 per share. This was an increase of $0.17 per share (from $9.99 at the beginning of the year to $10.16 at the end of the year). For a shareholder who reinvested the distributions in the purchase of more shares, the total return was 6.92% for the year.

As of December 31, 2007, the Investor Shares had approximately $29.5 billion in net assets. For the year, the expense ratio was 0.19% ($1.90 per $1,000 of net assets), and the net investment income amounted to 5.02% of average net assets. The Fund sold and replaced securities valued at 54% of its net assets.

Total Bond Market Index Fund Investor Shares
 Year Ended December 31,
 ------------------------------------------------------------
 2007 2006 2005 2004 2003
--------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $9.99 $10.06 $10.27 $10.31 $10.38
--------------------------------------------------------------------------------------------------------------------------
Investment Operations
--------------------------------------------------------------------------------------------------------------------------
Net Investment Income .501 .485 .446 .441 .465
--------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss)
on Investments .170 (.070) (.205) (.014) (.060)
--------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations .671 .415 .241 .427 .405
--------------------------------------------------------------------------------------------------------------------------
Distributions
--------------------------------------------------------------------------------------------------------------------------
Dividends from Net Investment Income (.501) (.485) (.449) (.446) (.475)
--------------------------------------------------------------------------------------------------------------------------
Distributions from Realized Capital Gains -- -- (.002) (.021) --
--------------------------------------------------------------------------------------------------------------------------
Total Distributions (.501) (.485) (.451) (.467) (.475)
--------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $10.16 $9.99 $10.06 $10.27 $10.31
==========================================================================================================================
Total Return(1) 6.92% 4.27% 2.40% 4.24% 3.97%
==========================================================================================================================
Ratios/Supplemental Data
--------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (Millions) $29,532 $23,769 $21,643 $19,479 $17,032
--------------------------------------------------------------------------------------------------------------------------
Ratio of Total Expenses to
Average Net Assets 0.19% 0.20% 0.20% 0.20% 0.22%
--------------------------------------------------------------------------------------------------------------------------
Ratio of Net Investment Income to
Average Net Assets 5.02% 4.88% 4.40% 4.29% 4.46%
--------------------------------------------------------------------------------------------------------------------------
Turnover Rate(2) 54% 63% 59% 59% 89%
==========================================================================================================================
1 Total returns do not include the account service fee that may be applicable
 to certain accounts with balances below $10,000.
2 Excludes the value of portfolio securities received or delivered as a result
 of in-kind purchases or redemptions of the Fund's capital shares, including
 ETF Creation Units.

Total Bond Market Index Fund Admiral Shares
 Year Ended December 31,
 ------------------------------------------------------------
 2007 2006 2005 2004 2003
--------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $9.99 $10.06 $10.27 $10.31 $10.38
--------------------------------------------------------------------------------------------------------------------------
Investment Operations
--------------------------------------------------------------------------------------------------------------------------
Net Investment Income .510 .494 .455 .450 .472
--------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss)
on Investments .170 (.070) (.205) (.014) (.060)
--------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations .680 .424 .250 .436 .412
--------------------------------------------------------------------------------------------------------------------------
Distributions
--------------------------------------------------------------------------------------------------------------------------
Dividends from Net Investment Income (.510) (.494) (.458) (.455) (.482)
--------------------------------------------------------------------------------------------------------------------------
Distributions from Realized Capital Gains -- -- (.002) (.021) --
--------------------------------------------------------------------------------------------------------------------------
Total Distributions (.510) (.494) (.460) (.476) (.482)
--------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $10.16 $9.99 $10.06 $10.27 $10.31
==========================================================================================================================
Total Return 7.02% 4.36% 2.49% 4.33% 4.04%
==========================================================================================================================
Ratios/Supplemental Data
--------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (Millions) $10,232 $7,900 $4,529 $2,502 $2,092
--------------------------------------------------------------------------------------------------------------------------
Ratio of Total Expenses to
Average Net Assets 0.10% 0.11% 0.11% 0.11% 0.15%
--------------------------------------------------------------------------------------------------------------------------
Ratio of Net Investment Income to
Average Net Assets 5.11% 4.97% 4.49% 4.38% 4.52%
--------------------------------------------------------------------------------------------------------------------------
Turnover Rate(1) 54% 63% 59% 59% 89%
==========================================================================================================================
1 Excludes the value of portfolio securities received or delivered as a result
 of in-kind purchases or redemptions of the Fund's capital shares, including
 ETF Creation Units.

Short-Term Bond Index Fund Investor Shares
 Year Ended December 31,
 ------------------------------------------------------------
 2007 2006 2005 2004 2003
--------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $9.89 $9.92 $10.14 $10.28 $10.32
--------------------------------------------------------------------------------------------------------------------------
Investment Operations
--------------------------------------------------------------------------------------------------------------------------
Net Investment Income .456 .426 .350 .303 .329
--------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss)
on Investments .240 (.030) (.220) (.131) .015
--------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations .696 .396 .130 .172 .344
--------------------------------------------------------------------------------------------------------------------------
Distributions
--------------------------------------------------------------------------------------------------------------------------
Dividends from Net Investment Income (.456) (.426) (.350) (.303) (.329)
--------------------------------------------------------------------------------------------------------------------------
Distributions from Realized Capital Gains -- -- -- (.009) (.055)
--------------------------------------------------------------------------------------------------------------------------
Total Distributions (.456) (.426) (.350) (.312) (.384)
--------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $10.13 $9.89 $9.92 $10.14 $10.28
==========================================================================================================================
Total Return(1) 7.22% 4.09% 1.31% 1.70% 3.37%
==========================================================================================================================
Ratios/Supplemental Data
--------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (Millions) $2,773 $2,731 $2,951 $3,795 $3,041
--------------------------------------------------------------------------------------------------------------------------
Ratio of Total Expenses to
Average Net Assets 0.18% 0.18% 0.18% 0.18% 0.20%
--------------------------------------------------------------------------------------------------------------------------
Ratio of Net Investment Income to
Average Net Assets 4.58% 4.32% 3.50% 2.97% 3.17%
--------------------------------------------------------------------------------------------------------------------------
Turnover Rate(2) 79% 106% 106% 92% 111%
==========================================================================================================================
1 Total returns do not include the account service fee that may be applicable
 to certain accounts with balances below $10,000.
2 Excludes the value of portfolio securities received or delivered as a result
 of in-kind purchases or redemptions of the Fund's capital shares, including
 ETF Creation Units.

Short-Term Bond Index Fund Admiral Shares
 Year Ended December 31,
 ------------------------------------------------------------
 2007 2006 2005 2004 2003
--------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $9.89 $9.92 $10.14 $10.28 $10.32
--------------------------------------------------------------------------------------------------------------------------
Investment Operations
--------------------------------------------------------------------------------------------------------------------------
Net Investment Income .464 .433 .357 .310 .334
--------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss)
on Investments .240 (.030) (.220) (.131) .015
--------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations .704 .403 .137 .179 .349
--------------------------------------------------------------------------------------------------------------------------
Distributions
--------------------------------------------------------------------------------------------------------------------------
Dividends from Net Investment Income (.464) (.433) (.357) (.310) (.334)
--------------------------------------------------------------------------------------------------------------------------
Distributions from Realized Capital Gains -- -- -- (.009) (.055)
--------------------------------------------------------------------------------------------------------------------------
Total Distributions (.464) (.433) (.357) (.319) (.389)
--------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $10.13 $9.89 $9.92 $10.14 $10.28
==========================================================================================================================
Total Return 7.31% 4.16% 1.38% 1.77% 3.43%
==========================================================================================================================
Ratios/Supplemental Data
--------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (Millions) $1,502 $2,528 $2,326 $1,469 $1,177
--------------------------------------------------------------------------------------------------------------------------
Ratio of Total Expenses to
Average Net Assets 0.10% 0.11% 0.11% 0.10% 0.15%
--------------------------------------------------------------------------------------------------------------------------
Ratio of Net Investment Income to
Average Net Assets 4.66% 4.39% 3.57% 3.05% 3.21%
--------------------------------------------------------------------------------------------------------------------------
Turnover Rate(1) 79% 106% 106% 92% 111%
==========================================================================================================================
1 Excludes the value of portfolio securities received or delivered as a result
 of in-kind purchases or redemptions of the Fund's capital shares, including
 ETF Creation Units.

Intermediate-Term Bond Index Fund Investor Shares
 Year Ended December 31,
 ------------------------------------------------------------
 2007 2006 2005 2004 2003
--------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $10.25 $10.36 $10.68 $10.69 $10.75
--------------------------------------------------------------------------------------------------------------------------
Investment Operations
--------------------------------------------------------------------------------------------------------------------------
Net Investment Income .507 .499 .492 .506 .532
--------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss)
on Investments .250 (.110) (.309) .038 .064
--------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations .757 .389 .183 .544 .596
--------------------------------------------------------------------------------------------------------------------------
Distributions
--------------------------------------------------------------------------------------------------------------------------
Dividends from Net Investment Income (.507) (.499) (.492) (.506) (.532)
--------------------------------------------------------------------------------------------------------------------------
Distributions from Realized Capital Gains -- -- (.011) (.048) (.124)
--------------------------------------------------------------------------------------------------------------------------
Total Distributions (.507) (.499) (.503) (.554) (.656)
--------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $10.50 $10.25 $10.36 $10.68 $10.69
==========================================================================================================================
Total Return(1) 7.61% 3.91% 1.75% 5.22% 5.65%
==========================================================================================================================
Ratios/Supplemental Data
--------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (Millions) $3,020 $2,929 $3,009 $3,501 $2,749
--------------------------------------------------------------------------------------------------------------------------
Ratio of Total Expenses to
Average Net Assets 0.18% 0.18% 0.18% 0.18% 0.20%
--------------------------------------------------------------------------------------------------------------------------
Ratio of Net Investment Income to
Average Net Assets 4.74% 4.91% 4.68% 4.75% 4.91%
--------------------------------------------------------------------------------------------------------------------------
Turnover Rate(2) 72% 86% 76% 84% 98%
==========================================================================================================================
1 Total returns do not include the account service fee that may be applicable
 to certain accounts with balances below $10,000.
2 Excludes the value of portfolio securities received or delivered as a result
 of in-kind purchases or redemptions of the Fund's capital shares, including
 ETF Creation Units.

Intermediate-Term Bond Index Fund Admiral Shares
 Year Ended December 31,
 ------------------------------------------------------------
 2007 2006 2005 2004 2003
--------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $10.25 $10.36 $10.68 $10.69 $10.75
--------------------------------------------------------------------------------------------------------------------------
Investment Operations
--------------------------------------------------------------------------------------------------------------------------
Net Investment Income .515 .506 .499 .514 .538
--------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss)
on Investments .250 (.110) (.309) .038 .064
--------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations .765 .396 .190 .552 .602
--------------------------------------------------------------------------------------------------------------------------
Distributions
--------------------------------------------------------------------------------------------------------------------------
Dividends from Net Investment Income (.515) (.506) (.499) (.514) (.538)
--------------------------------------------------------------------------------------------------------------------------
Distributions from Realized Capital Gains -- -- (.011) (.048) (.124)
--------------------------------------------------------------------------------------------------------------------------
Total Distributions (.515) (.506) (.510) (.562) (.662)
--------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $10.50 $10.25 $10.36 $10.68 $10.69
==========================================================================================================================
Total Return 7.70% 3.98% 1.82% 5.30% 5.70%
==========================================================================================================================
Ratios/Supplemental Data
--------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (Millions) $2,308 $3,118 $2,949 $1,127 $756
--------------------------------------------------------------------------------------------------------------------------
Ratio of Total Expenses to
Average Net Assets 0.10% 0.11% 0.11% 0.11% 0.15%
--------------------------------------------------------------------------------------------------------------------------
Ratio of Net Investment Income to
Average Net Assets 4.82% 4.98% 4.75% 4.82% 4.96%
--------------------------------------------------------------------------------------------------------------------------
Turnover Rate(1) 72% 86% 76% 84% 98%
==========================================================================================================================
1 Excludes the value of portfolio securities received or delivered as a result
 of in-kind purchases or redemptions of the Fund's capital shares, including
 ETF Creation Units.

Long-Term Bond Index Fund Investor Shares
 Year Ended December 31,
 ------------------------------------------------------------
 2007 2006 2005 2004 2003
--------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $11.53 $11.84 $11.82 $11.50 $11.67
--------------------------------------------------------------------------------------------------------------------------
Investment Operations
--------------------------------------------------------------------------------------------------------------------------
Net Investment Income .613 .603 .601 .617 .627
--------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss)
on Investments .120 (.310) .020 .320 .004
--------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations .733 .293 .621 .937 .631
--------------------------------------------------------------------------------------------------------------------------
Distributions
--------------------------------------------------------------------------------------------------------------------------
Dividends from Net Investment Income (.613) (.603) (.601) (.617) (.627)
--------------------------------------------------------------------------------------------------------------------------
Distributions from Realized Capital Gains -- -- -- -- (.174)
--------------------------------------------------------------------------------------------------------------------------
Total Distributions (.613) (.603) (.601) (.617) (.801)
--------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $11.65 $11.53 $11.84 $11.82 $11.50
==========================================================================================================================
Total Return(1) 6.59% 2.67% 5.32% 8.40% 5.50%
==========================================================================================================================
Ratios/Supplemental Data
--------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (Millions) $2,277 $1,898 $1,893 $1,310 $951
--------------------------------------------------------------------------------------------------------------------------
Ratio of Total Expenses to
Average Net Assets 0.18% 0.18% 0.18% 0.18% 0.20%
--------------------------------------------------------------------------------------------------------------------------
Ratio of Net Investment Income to
Average Net Assets 5.34% 5.30% 5.03% 5.34% 5.34%
--------------------------------------------------------------------------------------------------------------------------
Turnover Rate(2) 62% 55% 52% 62% 76%
==========================================================================================================================
1 Total returns do not include the account service fee that may be applicable
 to certain accounts with balances below $10,000.
2 Excludes the value of portfolio securities received or delivered as a result
 of in-kind purchases or redemptions of the Fund's capital shares, including
 ETF Creation Units.

INVESTING WITH VANGUARD

This section of the prospectus explains the basics of doing business with Vanguard. Be sure to carefully read each topic that pertains to your relationship with Vanguard. Vanguard reserves the right to change the following policies, without prior notice to shareholders. Please call or check online for current information.

Each fund you hold in an account is a separate "fund account." For example, if you hold three funds in a nonretirement account titled in your own name, two funds in a nonretirement account titled jointly with your spouse, and one fund in an individual retirement account, you have six fund accounts--and this is true even if you hold the same fund in multiple accounts.

Purchasing Shares

Vanguard reserves the right, without prior notice, to increase or decrease the minimum amount required to open, convert shares to, or maintain a fund account, or to add to an existing fund account.

Investment minimums may differ for certain categories of investors.

Account Minimums for Investor Shares

To open and maintain an account. $3,000.

To add to an existing account. $50 by Automatic Investment Plan; $100 by check, exchange, wire, or electronic bank transfer (other than Automatic Investment Plan).

Account Minimums for Admiral Shares

To open and maintain an account. $100,000 for new investors. Shareholders who are registered on Vanguard.com, have held shares of the Fund for ten years, and have $50,000 or more in the same Fund account are eligible to convert their Investor Shares to Admiral Shares. See Converting Shares. Institutional clients should contact Vanguard for information on special rules that may apply to them.

To add to an existing account. $50 by Automatic Investment Plan; $100 by check, exchange, wire, or electronic bank transfer (other than Automatic Investment Plan).

How to Initiate a Purchase Request
Be sure to check Exchanging Shares, Frequent-Trading Limits, and Other Rules You Should Know before placing your purchase request.

Online. You may open certain types of accounts, request an electronic bank transfer, and make an exchange (using the proceeds from the redemption of shares from one Vanguard fund to simultaneously purchase shares of a different Vanguard fund) through our website at www.vanguard.com if you are a registered user.

By telephone. You may call Vanguard to begin the account registration process or request that the account-opening forms be sent to you. You may also request a purchase of shares by wire, by electronic bank transfer, or by an exchange. See Contacting Vanguard.

By mail. You may send your account registration form and check to open a new fund account at Vanguard. To add to an existing fund account, you may send your check with an Invest-by-Mail form (from your account statement) or with a deposit slip (available online). You may also send a written request to Vanguard to add to a fund account or to make an exchange. For a list of Vanguard addresses, see Contacting Vanguard.

Transaction Fee on Purchases
The Funds reserve the right to charge a transaction fee to investors whose aggregate share purchases equal or exceed the following amounts:

. Total Bond Market Index Fund--$500 million

. Short-Term Bond Index Fund--$100 million

. Intermediate-Term Bond Index Fund--$100 million

. Long-Term Bond Index Fund--$100 million

How to Pay For a Purchase

By electronic bank transfer. You may purchase shares of a Vanguard fund through an electronic transfer of money held in a designated bank account. To establish the electronic bank transfer option on an account, you must designate a bank account online, complete a special form, or fill out the appropriate section of your account registration form. After the option is set up on your account, you can purchase shares by electronic bank transfer on a regular schedule (Automatic Investment Plan) or whenever you wish. Your purchase request can be initiated online, by telephone, or by mail.

By wire. Wiring instructions vary for different types of purchases. Please call Vanguard for instructions and policies on purchasing shares by wire. See Contacting Vanguard.

By check. You may send a check to make initial or additional purchases to your fund account. Also see How to Initiate a Purchase Request: By mail. Make your check payable to Vanguard and include the appropriate fund number (e.g., Vanguard--xx). For a list of Fund numbers (for Funds and share classes in this prospectus), see Contacting Vanguard.

By exchange. You may purchase shares of a Vanguard fund using the proceeds from the simultaneous redemption of shares from another Vanguard fund. You may initiate an exchange online (if you are a registered user of Vanguard.com), by telephone, or by mail. See Exchanging Shares.

Trade Date

The trade date for any purchase request received in good order will depend on the day and time Vanguard receives your request, the manner in which you are paying, and the type of fund you are purchasing. Your purchase will be executed using the NAV as calculated on the trade date. NAVs are calculated only on days the New York Stock Exchange (NYSE) is open for trading (a business day).

For purchases by check into all funds other than money market funds, and for purchases by exchange or wire into all funds: If the purchase request is received by Vanguard on a business day before the close of regular trading on the NYSE (generally 4 p.m., Eastern time), the trade date will be the same day. If the purchase request is received on a business day after the close of regular trading on the NYSE, or on a nonbusiness day, the trade date will be the next business day.

For purchases by check into money market funds: If the purchase request is received by Vanguard on a business day before the close of regular trading on the NYSE (generally 4 p.m., Eastern time), the trade date will be the next business day. If the purchase request is received on a business day after the close of regular trading on the NYSE, or on a nonbusiness day, the trade date will be the second business day following the day Vanguard receives the purchase request. Because money market instruments must be purchased with federal funds and it takes a money market mutual fund one business day to convert check proceeds into federal funds, the trade date will be one business day later than for other funds.

For purchases by electronic bank transfer using an Automatic Investment Plan:
Your trade date generally will be one business day before the date you designated for withdrawal from your bank account.

For purchases by electronic bank transfer not using an Automatic Investment Plan: If the purchase request is received by Vanguard on a business day before 10 p.m., Eastern time, the trade date will be the next business day. If the purchase request is received on a business day after 10 p.m., Eastern time, or on a nonbusiness day, the trade date will be the second business day following the day Vanguard receives the request.

If your purchase request is not accurate and complete, it may be rejected. See Other Rules You Should Know--Good Order.

For further information about purchase transactions, consult our website at www.vanguard.com or see Contacting Vanguard.

Earning Dividends
You begin earning dividends on the business day following your trade date. When buying money market fund shares through a federal funds wire, however, you can begin earning dividends immediately by making a purchase request by telephone to

Vanguard before 10:45 a.m., Eastern time (2 p.m., Eastern time, for Vanguard Prime Money Market Fund).

Other Purchase Rules You Should Know

Admiral Shares. Please note that Admiral Shares are not available for:

. SIMPLE IRAs and 403(b)(7) custodial accounts;

. Other retirement plan accounts receiving special administrative services from Vanguard; or

. Accounts maintained by financial intermediaries, except in limited circumstances.

Check purchases. All purchase checks must be written in U.S. dollars and must be drawn on a U.S. bank. Vanguard does not accept cash, traveler's checks, or money orders. In addition, Vanguard may refuse "starter checks" and checks that are not made payable to Vanguard.

New accounts. We are required by law to obtain from you certain personal information that we will use to verify your identity. If you do not provide the information, we may not be able to open your account. If we are unable to verify your identity, Vanguard reserves the right, without prior notice, to close your account or take such other steps as we deem reasonable.

Refused or rejected purchase requests. Vanguard reserves the right to stop selling fund shares or to reject any purchase request at any time and without prior notice, including, but not limited to, purchases requested by exchange from another Vanguard fund. This also includes the right to reject any purchase request because of a history of frequent trading by the investor or because the purchase may negatively affect a fund's operation or performance.

Large purchases. Please call Vanguard before attempting to invest a large dollar amount.

No cancellations. Vanguard will not accept your request to cancel any purchase request once processing has begun. Please be careful when placing a purchase request.

Converting Shares

When a conversion occurs, you receive shares of one class in place of shares of another class of the same fund. At the time of conversion, the dollar value of the "new" shares you receive equals the dollar value of the "old" shares that were converted. In other words, the conversion has no effect on the value of your investment in the fund. However, the number of shares you own after the conversion may be greater than or less than the number of shares you owned before the conversion, depending on the net asset values of the two share classes.

A conversion between share classes of the same fund is a nontaxable event.

Trade Date
The trade date for any conversion request received in good order will depend on the day and time Vanguard receives your request. Your conversion will be executed using the NAV of the different share classes on the trade date. NAVs are calculated only on days the NYSE is open for trading (a business day).

For a conversion request received by Vanguard on a business day before the close of regular trading on the NYSE (generally 4 p.m., Eastern time), the trade date will be the same day. For a conversion request received on a business day after the close of regular trading on the NYSE, or on a nonbusiness day, the trade date will be the next business day. See Other Rules You Should Know.

Conversions From Investor Shares to Admiral Shares

Self-directed conversions. If your account balance in the Fund is at least $100,000, you may ask Vanguard to convert your Investor Shares to Admiral Shares. You can make conversion requests online (if you are a registered user of Vanguard.com), by telephone, or by mail. See Contacting Vanguard.

Automatic conversions. Vanguard conducts periodic reviews of account balances and may, if your account balance in the Fund exceeds $100,000, automatically convert your Investor Shares to Admiral Shares. You will be notified before an automatic conversion occurs and will have an opportunity to instruct Vanguard not to effect the conversion.

Tenure conversions. You are eligible for a tenure conversion from Investor Shares to Admiral Shares if you have had an account in the Fund for ten years, that account balance is at least $50,000, and you are registered with Vanguard.com. You may request a tenure conversion online, by telephone, or by mail.

Conversions to Institutional Shares
You are eligible for a self-directed conversion from Investor Shares or Admiral Shares to Institutional Shares of the same Fund, provided that your account balance in the Fund is at least $5 million for Total Bond Market Index Fund or $25 million for Intermediate-Term or Long-Term Bond Index Funds. Registered users of our website, www. vanguard.com, may request a conversion online, or you may contact Vanguard by telephone or by mail to request this transaction. Accounts that qualify for Institutional Shares will not be automatically converted.

Mandatory Conversions to Another Share Class If an account no longer meets the balance requirements for a share class, Vanguard may automatically convert the shares in the account to another share class, as

appropriate. A decline in the account balance because of market movement may result in such a conversion. Vanguard will notify the investor in writing before any mandatory conversion occurs.

Redeeming Shares

How to Initiate a Redemption Request
Be sure to check Exchanging Shares, Frequent-Trading Limits, and Other Rules You Should Know before placing your redemption request.

Online. You may redeem shares, request an electronic bank transfer, and make an exchange (the purchase of shares of one Vanguard fund using the proceeds of a simultaneous redemption from another Vanguard fund) through our website at www.vanguard.com if you are a registered user.

By telephone. You may call Vanguard to request a redemption of shares by wire, by electronic bank transfer, by check, or by an exchange. See Contacting Vanguard.

By mail. You may send a written request to Vanguard to redeem from a fund account or to make an exchange. See Contacting Vanguard.

By writing a check. If you've established the checkwriting service on your account, you can redeem shares by writing a check for $250 or more.

How to Receive Redemption Proceeds

By electronic bank transfer. You may have the proceeds of a fund redemption sent directly to a designated bank account. To establish the electronic bank transfer option, you must designate a bank account online, complete a special form, or fill out the appropriate section of your account registration form. After the option is set up on your account, you can redeem shares by electronic bank transfer on a regular schedule (Automatic Withdrawal Plan--$50 minimum) or whenever you wish ($100 minimum). Your transaction can be initiated online, by telephone, or by mail.

By wire. When redeeming from a money market fund or a bond fund, you may instruct Vanguard to wire your redemption proceeds ($1,000 minimum) to a previously designated bank account. Wire redemptions generally are not available for Vanguard's balanced or stock funds. The wire redemption option is not automatic; you must designate a bank account online, complete a special form, or fill out the appropriate section of your account registration form. Vanguard charges a $5 fee for wire redemptions under $5,000.

By exchange. You may have the proceeds of a Vanguard fund redemption invested directly in shares of another Vanguard fund. You may initiate an exchange online (if you are a registered user of Vanguard.com), by telephone, or by mail.

By check. If you have not chosen another redemption method, Vanguard will mail you a redemption check, normally within two business days of your trade date.

Trade Date

The trade date for any redemption request received in good order will depend on the day and time Vanguard receives your request and the manner in which you are redeeming. Your redemption will be executed using the NAV as calculated on the trade date. NAVs are calculated only on days that the NYSE is open for trading (a business day).

For redemptions by check, exchange, or wire: If the redemption request is received by Vanguard on a business day before the close of regular trading on the NYSE (generally 4 p.m., Eastern time), the trade date will be the same day. If the redemption request is received on a business day after the close of regular trading on the NYSE, or on a nonbusiness day, the trade date will be the next business day.

. Note on timing of wire redemptions from money market funds: For telephone requests received by Vanguard on a business day before 10:45 a.m., Eastern time (2 p.m., Eastern time, for Vanguard Prime Money Market Fund), the redemption proceeds will leave Vanguard by the close of business the same day. For telephone requests received by Vanguard on a business day after those cut-off times, or on a nonbusiness day, and for all requests other than by telephone, the redemption proceeds will leave Vanguard by the close of business on the next business day.

. Note on timing of wire redemptions from bond funds: For requests received by Vanguard on a business day before the close of regular trading on the NYSE (generally 4 p.m., Eastern time), the redemption proceeds will leave Vanguard by the close of business on the next business day. For requests received by Vanguard on a business day after the close of regular trading on the NYSE, or on a nonbusiness day, the redemption proceeds will leave Vanguard by the close of business on the second business day after Vanguard receives the request.

For redemptions by electronic bank transfer using an Automatic Withdrawal Plan:
Your trade date generally will be the date you designated for withdrawal of funds (redemption of shares) from your Vanguard account. Proceeds of redeemed shares generally will be credited to your designated bank account two business days after your trade date. If the date you designated for withdrawal falls on a weekend, holiday, or other nonbusiness day, your trade date will be the previous business day.

For redemptions by electronic bank transfer not using an Automatic Withdrawal Plan: If the redemption request is received by Vanguard on a business day before the close of regular trading on the NYSE (generally 4 p.m., Eastern time), the trade date generally will be the same day. If the redemption request is received on a business

day after the close of regular trading on the NYSE, or on a nonbusiness day, the trade date will be the next business day.

If your redemption request is not accurate and complete, it may be rejected. See Other Rules You Should Know--Good Order.

For further information about redemption transactions, consult our website at www.vanguard.com or see Contacting Vanguard.

Earning Dividends

Shares continue earning dividends through your trade date. There are two exceptions to this rule: (1) If you redeem shares by writing a check against your account, the shares will stop earning dividends on the day that your check posts to your account; and (2) For money market funds only, if you redeem shares with a same-day wire request before 10:45 a.m., Eastern time (2 p.m., Eastern time for Vanguard Prime Money Market Fund), the shares will stop earning dividends that same day.

Other Redemption Rules You Should Know

Documentation for certain accounts. Special documentation may be required to redeem from certain types of accounts, such as trust, corporate, nonprofit, or retirement accounts. Please call us before attempting to redeem from these types of accounts.

Potentially disruptive redemptions. Vanguard reserves the right to pay all or part of a redemption in kind--that is, in the form of securities--if we reasonably believe that a cash redemption would negatively affect the fund's operation or performance or that the shareholder may be engaged in market-timing or frequent trading. Under these circumstances, Vanguard also reserves the right to delay payment of the redemption proceeds for up to seven calendar days. By calling us before you attempt to redeem a large dollar amount, you may avoid in-kind or delayed payment of your redemption. Please see Frequent-Trading Limits for information about Vanguard's policies to limit frequent trading.

Recently purchased shares. Although you can redeem shares at any time, proceeds may not be made available to you until the fund collects payment for your purchase. This may take up to ten calendar days for shares purchased by check or by electronic bank transfer. If you have written a check on a fund with checkwriting privileges, that check may be rejected if your fund account does not have a sufficient available balance.

Share certificates. If you hold shares in certificates, those shares cannot be redeemed, exchanged, or converted until you return the certificates (unsigned) to Vanguard by registered mail. For the correct address, see Contacting Vanguard.

Address change. If you change your address online or by telephone, there may be a 15-day restriction on your ability to make online and telephone redemptions. You can request a redemption in writing at any time. Confirmations of address changes are sent to both the old and new addresses.

Payment to a different person or address. At your request, we can make your redemption check payable, or wire your redemption proceeds, to a different person or send it to a different address. However, this requires the written consent of all registered account owners and may require a signature guarantee. You can obtain a signature guarantee from most commercial and savings banks, credit unions, trust companies, or member firms of a U.S. stock exchange. A notary public cannot provide a signature guarantee.

No cancellations. Vanguard will not accept your request to cancel any redemption request once processing has begun. Please be careful when placing a redemption request.

Emergency circumstances. Vanguard funds can postpone payment of redemption proceeds for up to seven calendar days. In addition, Vanguard funds can suspend redemptions and/or postpone payments of redemption proceeds beyond seven calendar days at times when the NYSE is closed or during emergency circumstances, as determined by the SEC.

Exchanging Shares

An exchange occurs when you use the proceeds from the redemption of shares of one Vanguard fund to simultaneously purchase shares of a different Vanguard fund. You can make exchange requests online (if you are a registered user of Vanguard.com), by telephone, or by mail. See Purchasing Shares and Redeeming Shares.

If the NYSE is open for regular trading (a business day) at the time an exchange request is received in good order, the trade date will generally be the same day. See Other Rules You Should Know--Good Order for additional information on all transaction requests.

Please note that Vanguard reserves the right, without prior notice, to revise or terminate the exchange privilege, limit the amount of any exchange, or reject an exchange, at any time, for any reason.

Frequent-Trading Limits

Because excessive transactions can disrupt management of a fund and increase the fund's costs for all shareholders, Vanguard places certain limits on frequent trading in the Vanguard funds. Each Vanguard fund (other than money market funds, short-term bond funds, and ETF Shares) limits an investor's purchases or exchanges into a fund

account for 60 calendar days after the investor has redeemed or exchanged out of that fund account.

For Vanguard Retirement Investment Program pooled plans, the policy applies to exchanges made by participants online or by phone.

The policy does not apply to the following:

. Purchases of shares with reinvested dividend or capital gains distributions.

. Transactions through Vanguard's Automatic Investment Plan, Automatic Exchange Service, Direct Deposit Service, Automatic Withdrawal Plan, Required Minimum Distribution Service, and Vanguard Small Business Online/(R)/.

. Redemptions of shares to pay fund or account fees.

. Transaction requests submitted by mail to Vanguard from shareholders who hold their accounts directly with Vanguard. (Wire transactions and transaction requests submitted by fax are not mail transactions and are subject to the policy.)

. Transfers and re-registrations of shares within the same fund.

. Purchases of shares by asset transfer or direct rollover.

. Conversions of shares from one share class to another in the same fund.

. Checkwriting redemptions.

. Section 529 college savings plans.

. Certain approved institutional portfolios and asset allocation programs, as well as trades made by Vanguard funds that invest in other Vanguard funds. (Please note that shareholders of Vanguard's funds of funds are subject to the policy.)

For participants in employer-sponsored defined contribution plans that are not served by Vanguard Small Business Services, the frequent-trading policy does not apply to:

. Purchases of shares with participant payroll or employer contributions or loan repayments.

. Purchases of shares with reinvested dividend or capital gains distributions.

. Distributions, loans, and in-service withdrawals from a plan.

. Redemptions of shares as part of a plan termination or at the direction of the plan.

. Automated transactions executed during the first six months of a participant's enrollment in the Vanguard Managed Account Program.

. Redemptions of shares to pay fund or account fees.

. Share or asset transfers or rollovers.

. Re-registrations of shares.

. Conversions of shares from one share class to another in the same fund.

. Exchange requests submitted by mail to Vanguard. (Exchange requests submitted by fax or wire are not mail requests and remain subject to the policy.)

Accounts Held by Institutions (Other Than Defined Contribution Plans) Vanguard will systematically monitor for frequent trading in institutional clients' accounts. If we detect suspicious trading activity, we will investigate and take appropriate action, which may include applying to a client's accounts the 60-day policy previously described, prohibiting a client's purchases of fund shares, and/or eliminating the client's exchange privilege.

Accounts Held by Intermediaries

When intermediaries establish accounts in Vanguard funds for their clients, we cannot always monitor the trading activity of the individual clients. However, we review trading activity at the omnibus level, and if we detect suspicious activity, we will investigate and take appropriate action. If necessary, Vanguard may prohibit additional purchases of fund shares by an intermediary or by certain of the intermediary's clients. Intermediaries may also monitor their clients' trading activities in the Vanguard funds.

For those Vanguard funds that charge purchase or redemption fees, intermediaries will be asked to assess purchase and redemption fees on shareholder and participant accounts and remit these fees to the funds. The application of purchase and redemption fees and frequent-trading policies may vary among intermediaries. There are no assurances that Vanguard will successfully identify all intermediaries or that intermediaries will properly assess purchase and redemption fees or administer frequent-trading policies. If you invest with Vanguard through an intermediary, please read that firm's materials carefully to learn of any other rules or fees that may apply.

Other Rules You Should Know

Prospectus and Shareholder Report Mailings Vanguard attempts to eliminate the unnecessary expense of duplicate mailings by sending just one prospectus and/or report when two or more shareholders have the same last name and address. You may request individual prospectuses and reports by contacting our Client Services Department in writing, by telephone, or by e-mail.

Vanguard.com

Registration. If you are a registered user of Vanguard.com, you can use your personal computer to review your account holdings; to buy, sell, or exchange shares of most Vanguard funds; and to perform most other transactions. You must register for this service online.

Electronic delivery. Vanguard can deliver your account statements, transaction confirmations, and fund financial reports electronically. If you are a registered user of Vanguard.com, you can consent to the electronic delivery of these documents by logging on and changing your mailing preference under "Account Profile." You can revoke your electronic consent at any time, and we will begin to send paper copies of these documents within 30 days of receiving your notice.

Telephone Transactions

Automatic. When we set up your account, we'll automatically enable you to do business with us by telephone, unless you instruct us otherwise in writing.

Tele-Account/(R)/. To conduct account transactions through Vanguard's automated telephone service, you must first obtain a Personal Identification Number (PIN). Call Tele-Account at 800-662-6273 to obtain a PIN, and allow seven days after requesting the PIN before using this service.

Proof of a caller's authority. We reserve the right to refuse a telephone request if the caller is unable to provide the requested information or if we reasonably believe that the caller is not an individual authorized to act on the account. Before we allow a caller to act on an account, we may request the following information:

. Authorization to act on the account (as the account owner or by legal documentation or other means).

. Account registration and address.

. Fund name and account number, if applicable.

. Other information relating to the caller, the account holder, or the account.

Subject to revision. For any or all shareholders, we reserve the right, at any time
and without prior notice, to revise, suspend, or terminate the privilege to transact or communicate with Vanguard by telephone.

Good Order
We reserve the right to reject any transaction instructions that are not in "good order." Good order generally means that your instructions include:

. The fund name and account number.

. The amount of the transaction (stated in dollars, shares, or percentage).

Written instructions also must include:

. Signatures of all registered owners.

. Signature guarantees, if required for the type of transaction. (Call Vanguard for specific signature-guarantee requirements.)

. Any supporting documentation that may be required.

The requirements vary among types of accounts and transactions.

Vanguard reserves the right, without prior notice, to revise the requirements for good order.

Future Trade-Date Requests

Vanguard does not accept requests to hold a purchase, conversion, redemption, or exchange transaction for a future date. All such requests will receive trade dates as previously described in Purchasing Shares, Converting Shares, and Redeeming Shares. Vanguard reserves the right to return future-dated purchase checks.

Accounts With More Than One Owner
If an account has more than one owner or authorized person, Vanguard will accept telephone or online instructions from any one owner or authorized person.

Responsibility for Fraud

Vanguard will not be responsible for any account losses because of fraud if we reasonably believe that the person transacting business on an account is authorized to do so. Please take precautions to protect yourself from fraud. Keep your account information private, and immediately review any account statements that we provide to you. It is important that you contact Vanguard immediately about any transactions you believe to be unauthorized.

Uncashed Checks
Please cash your distribution or redemption checks promptly. Vanguard will not pay interest on uncashed checks.

Unusual Circumstances
If you experience difficulty contacting Vanguard online, by telephone, or by Tele-Account, you can send us your transaction request by regular or express mail. See Contacting Vanguard for addresses.

Investing With Vanguard Through Other Firms

You may purchase or sell shares of most Vanguard funds through a financial intermediary, such as a bank, broker, or investment advisor. Please consult your financial intermediary to determine which, if any, shares are available through that firm and to learn about other rules that may apply.

Please see Frequent-Trading Limits--Accounts Held by Intermediaries for information about the assessment of redemption fees and monitoring of frequent trading for accounts held by intermediaries.

Account Service Fee
For most shareholders, Vanguard deducts a $20 account service fee from all fund accounts that have a balance below $10,000 for any reason, including market fluctuation. The account service fee applies to both retirement and nonretirement fund accounts. The fee will be assessed on fund accounts in all Vanguard funds, regardless of a fund's minimum investment amount. The account service fee, which will be collected by redeeming fund shares in the amount of $20, will be deducted from a fund account only once per calendar year.

If you register on Vanguard.com and elect to receive electronic delivery of statements, reports, and other materials for all of your fund accounts, the account service fee for balances below $10,000 will not be charged, so long as that election remains in effect.

The account service fee also does not apply to the following:

. Money market sweep accounts held through Vanguard Brokerage Services/(R)/.

. Accounts held through intermediaries.

. Accounts held by Voyager, Voyager Select, and Flagship clients. Membership is based on total household assets held at Vanguard, with a minimum of $100,000 to qualify for Vanguard Voyager Services/TM/, $500,000 for Vanguard Voyager Select Services/TM/, and $1 million for Vanguard Flagship Services/TM/. Vanguard determines membership by aggregating assets of all eligible accounts held by the investor and immediate family members who reside at the same address. Aggregate assets include investments in Vanguard mutual funds, Vanguard ETFs/TM/, annuities through Vanguard, the Vanguard 529 Plan, certain small-business accounts, and employer-sponsored retirement plans for which Vanguard provides recordkeeping services.

. Participant accounts in employer-sponsored defined contribution plans (other than those served by the Vanguard Small Business Services Department, which are subject to various fee structures). Please consult your enrollment materials for the rules that apply to your account.

. Section 529 college savings plans.

Low-Balance Accounts

Each Fund reserves the right, without prior notice, to liquidate any investment-only retirement-plan fund account or any nonretirement fund account whose balance falls below the minimum initial investment for any reason, including market fluctuation. Shares redeemed in accordance with this policy will be subject to applicable redemption fees.

Right to Change Policies

In addition to the rights expressly stated elsewhere in this prospectus, Vanguard reserves the right to (1) alter, add, or discontinue any conditions of purchase (including eligibility requirements), redemption, exchange, conversion, service, or privilege at any time without prior notice; (2) accept initial purchases by telephone; (3) freeze any account and/or suspend account services when Vanguard has received reasonable notice of a dispute regarding the assets in an account, including notice of a dispute between the registered or beneficial account owners or when we reasonably believe a fraudulent transaction may occur or has occurred; (4) temporarily freeze any account and/or suspend account services upon initial notification to Vanguard of the death of the shareholder until Vanguard receives required documentation in good order; (5) alter, impose, discontinue, or waive any redemption fee, account service fee, or other fees charged to a group of shareholders; and (6) redeem an account, without the owner's permission to do so, in cases of threatening conduct or suspicious, fraudulent, or illegal activity. Changes may affect any or all investors. These actions will be taken when, at the sole discretion of Vanguard management, we reasonably believe they are deemed to be in the best interest of a fund.

Share Classes
Vanguard reserves the right, without prior notice, to change the eligibility requirements of its share classes, including the types of clients who are eligible to purchase each share class.

Fund and Account Updates

Confirmation Statements

We will send (or provide online, whichever you prefer) a confirmation of your trade date and the amount of your transaction when you buy, sell, exchange, or convert shares. However, we will not send confirmations reflecting only checkwriting redemptions or the reinvestment of dividend or capital gains distributions. For any month in which you had a checkwriting redemption, a Checkwriting Activity Statement will be sent to you itemizing the checkwriting redemptions for that month. Promptly review each confirmation statement that we provide to you by mail or online. It is important that you contact Vanguard immediately with any questions you may have about any transaction reflected on a confirmation statement, or Vanguard will consider the transaction properly processed.

Portfolio Summaries

distributions, purchases, redemptions, exchanges, transfers, and conversions for the current calendar year. Promptly review each summary that we provide to you by mail or online. It is important that you contact Vanguard immediately with any questions you may have about any transaction reflected on the summary, or Vanguard will consider the transaction properly processed.

Tax Statements
For most taxable accounts, we will send annual tax statements to assist you in preparing your income tax returns. These statements, which are generally mailed in January, will report the previous year's dividend and capital gains distributions, proceeds from the sale of shares, and distributions from IRAs and other retirement plans. These statements can be viewed online.

Average-Cost Review Statements

For most taxable accounts, average-cost review statements will accompany annual 1099B tax forms. These tax forms show the average cost of shares that you redeemed during the previous calendar year, using the average-cost single-category method, which is one of the methods established by the IRS.

Annual and Semiannual Reports
We will send (or provide online, whichever you prefer) financial reports about Vanguard Bond Index Funds twice a year, in February and August. These comprehensive reports include overviews of the financial markets and provide the following specific Fund information:

. Performance assessments and comparisons with industry benchmarks.

. Financial statements with listings of Fund holdings.

Portfolio Holdings

We generally post on our website at www.vanguard.com, in the Holdings section of each Fund's Profile page, a detailed list of the securities held by the Fund (under Portfolio Holdings), as of the most recent calendar-quarter-end. This list is generally updated within 30 days after the end of each calendar quarter. Vanguard may exclude any portion of these portfolio holdings from publication when deemed in the best interest of the Fund. Please consult the Fund's Statement of Additional Information or our website for a description of the policies and procedures that govern disclosure of the Fund's portfolio holdings.

Contacting Vanguard

Web
----------------------------------------------------------------------------------------
Vanguard.com For the most complete source of Vanguard news
24 hours a day, 7 days For fund, account, and service information
a week For most account transactions
 For literature requests
----------------------------------------------------------------------------------------
Phone

----------------------------------------------------------------------------------------
Vanguard For automated fund and account information
Tele-Account/(R)/ For exchange transactions (subject to limitations)
800-662-6273 Toll-free, 24 hours a day, 7 days a week
(ON-BOARD)
----------------------------------------------------------------------------------------
Investor Information For fund and service information
800-662-7447 (SHIP) For literature requests
(Text telephone for Business hours only: Monday-Friday, 8 a.m. to 10 p.m.,
people with hearing Eastern time; Saturday, 9 a.m. to 4 p.m., Eastern time
impairment at
800-952-3335)
----------------------------------------------------------------------------------------
Client Services For account information
800-662-2739 (CREW) For most account transactions
(Text telephone for Business hours only: Monday-Friday, 8 a.m. to 10 p.m.,
people with hearing Eastern time; Saturday, 9 a.m. to 4 p.m., Eastern time
impairment at
800-749-7273)
----------------------------------------------------------------------------------------
Admiral Service Center For Admiral account information
888-237-9949 For most Admiral transactions
 Business hours only: Monday-Friday, 8 a.m. to 10 p.m.,
 Eastern time; Saturday, 9 a.m. to 4 p.m., Eastern time
----------------------------------------------------------------------------------------
Institutional Division For information and services for large institutional investors
888-809-8102 Business hours only: Monday-Friday, 8:30 a.m. to 9 p.m.,
 Eastern time
----------------------------------------------------------------------------------------
Intermediary Sales For information and services for financial intermediaries
Support including broker-dealers, trust institutions, insurance
800-997-2798 companies, and financial advisors
 Business hours only: Monday-Friday, 8:30 a.m. to 7 p.m.,
 Eastern time
----------------------------------------------------------------------------------------

Vanguard Addresses

Please be sure to use the correct address, depending on your method of delivery. Use of an incorrect address could delay the processing of your transaction.

Regular Mail (Individuals) The Vanguard Group
 P.O. Box 1110
 Valley Forge, PA 19482-1110
----------------------------------------------------------------------
Regular Mail (Institutions) The Vanguard Group
 P.O. Box 2900
 Valley Forge, PA 19482-2900
----------------------------------------------------------------------
Registered, Express, or Overnight The Vanguard Group
 455 Devon Park Drive
 Wayne, PA 19087-1815
----------------------------------------------------------------------

Fund Numbers
Please use the specific fund number when contacting us:

 Investor Shares Admiral Shares
-----------------------------------------------------------------------------
Vanguard Total Bond Market Index Fund 84 584
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Vanguard Short-Term Bond Index Fund 132 5132
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Vanguard Intermediate-Term Bond Index Fund 314 5314
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Vanguard Long-Term Bond Index Fund 522 --
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Vanguard, Vanguard.com, Connect with Vanguard, Plain Talk, Admiral, Signal, Vanguard Tele-Account, Tele-Account, Vanguard ETF, Vanguard ETFs, Vanguard Small Business Online, Vanguard Brokerage Services, Vanguard Voyager Services, Voyager, Vanguard Voyager Select Services, Voyager Select, Vanguard Flagship Services, Flagship, and the ship logo are trademarks of The Vanguard Group, Inc. CFA/(R)/ is a trademark owned by CFA Institute. All other marks are the exclusive property of their respective owners.

Glossary of Investment Terms

Active Management. An investment approach that seeks to exceed the average returns of the financial markets. Active managers rely on research, market forecasts, and their own judgment and experience in selecting securities to buy and sell.

Bond. A debt security (IOU) issued by a corporation, government, or government agency in exchange for the money you lend it. In most instances, the issuer agrees to pay back the loan by a specific date and make regular interest payments until that date.

Capital Gains Distribution. Payment to mutual fund shareholders of gains realized on securities that a fund has sold at a profit, minus any realized losses.

Corporate Bond. An IOU issued by a business that wants to borrow money. As with other types of bonds, the issuer promises to repay the borrowed money on a specific date and to make interest payments in the meantime.

Coupon. The interest rate paid by the issuer of a debt security until its maturity. It is expressed as an annual percentage of the face value of the security.

Dividend Distribution. Payment to mutual fund shareholders of income from interest or dividends generated by a fund's investments.

Expense Ratio. The percentage of a fund's average net assets used to pay its expenses during a fiscal year. The expense ratio includes management expenses--such as advisory fees, account maintenance, reporting, accounting, legal, and other administrative expenses--and any 12b-1 distribution fees. It does not include the transaction costs of buying and selling portfolio securities.

Face Value. The amount to be paid at a bond's maturity; also known as the par value or principal.

Fixed Income Security. An investment, such as a bond, representing a debt that must be repaid by a specified date, and on which the borrower must pay a fixed, variable, or floating rate of interest.

Inception Date. The date on which the assets of a fund (or one of its share classes) are first invested in accordance with the fund's investment objective. For funds with a subscription period, the inception date is the day after that period ends. Investment performance is measured from the inception date.

Index. An unmanaged group of securities whose overall performance is used as a standard to measure the investment performance of a particular market.

International Dollar-Denominated Bond. A bond denominated in U.S. dollars issued by foreign governments and companies. Because the bond's value is designated in dollars, an investor is not exposed to foreign-currency risk.

Investment-Grade Bond. A debt security whose credit quality is considered by independent bond-rating agencies, or through independent analysis conducted by a fund's advisor, to be sufficient to ensure timely payment of principal and interest under current economic circumstances. Debt securities rated in one of the four highest rating categories are considered "investment-grade." Other debt securities may be considered by the advisor to be investment-grade.

Mortgage-Backed Security. A bond or pass-through certificate that represents an interest in an underlying pool of mortgages and is issued by various government agencies or private corporations. Unlike ordinary fixed income securities, mortgage-backed securities include both interest and principal as part of their regular payments.

Net Asset Value (NAV). The market value of a mutual fund's total assets, minus liabilities, divided by the number of shares outstanding. The value of a single share is also called its share value or share price.

Passive Management. A low-cost investment strategy in which a mutual fund attempts to track--rather than outperform--a specified market benchmark or "index"; also known as indexing.

Principal. The face value of a debt instrument or the amount of money put into an investment.

Securities. Stocks, bonds, money market instruments, and other investment vehicles.

Total Return. A percentage change, over a specified time period, in a mutual fund's net asset value, assuming the reinvestment of all distributions of dividends and capital gains.

Volatility. The fluctuations in value of a mutual fund or other security. The greater a fund's volatility, the wider the fluctuations in its returns.

Yield. Income (interest or dividends) earned by an investment, expressed as a percentage of the investment's price.

[VANGUARD SHIP LOGO/R/]
P.O. Box 2600
Valley Forge, PA 19482-2600

CONNECT WITH VANGUARD/(R)/ > www.vanguard.com

For More Information
If you would like more information about Vanguard Bond Index Funds, the following documents are available free upon request:

Annual/Semiannual Reports to Shareholders Additional information about the Funds' investments is available in the Funds' annual and semiannual reports to shareholders. In the annual report, you will find a discussion of the market conditions and investment strategies that significantly affected the Funds' performance during their last fiscal year.

Statement of Additional Information (SAI) The SAI provides more detailed information about the Funds.

The current annual and semiannual reports and the SAI are incorporated by reference into (and are thus legally a part of) this prospectus.

To receive a free copy of the latest annual or semiannual report or the SAI, or to request additional information about the Funds or other Vanguard funds, please visit www.vanguard.com or contact us as follows:

The Vanguard Group
Investor Information Department
P.O. Box 2600
Valley Forge, PA 19482-2600
Telephone: 800-662-7447 (SHIP)
Text telephone for people with hearing impairment: 800-952-3335

If you are a current Vanguard shareholder and would like information about your account, account transactions, and/or account statements, please call:

Client Services Department
Telephone: 800-662-2739 (CREW)
Text telephone for people with hearing impairment: 800-749-7273

Information Provided by the Securities and Exchange Commission (SEC)
You can review and copy information about the Funds (including the SAI) at the SEC's Public Reference Room in Washington, DC. To find out more about this public service, call the SEC at 202-551-8090. Reports and other information about the Funds are also available in the EDGAR database on the SEC's Internet site at www.sec.gov, or you can receive copies of this information, for a fee, by electronic request at the following e-mail address: publicinfo@sec.gov, or by writing the Public Reference Section, Securities and Exchange Commission, Washington, DC 20549-0102.

Funds' Investment Company Act file number: 811-4681

P084 042008

Vanguard/(R)/ Bond Index Funds

> Prospectus

Investor Shares for Participants

April 25, 2008

[VANGUARD SHIP LOGO/R/

Vanguard Total Bond Market Index Fund

Vanguard Short-Term Bond Index Fund

Vanguard Intermediate-Term Bond Index Fund

Vanguard Long-Term Bond Index Fund

This prospectus contains financial data for the Funds through the fiscal year ended December 31, 2007.

Contents

------------------------------------------------------------------------------------------
Vanguard Fund Profiles 1 More on the Funds 18
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Total Bond Market Index Fund 1 The Funds and Vanguard 28
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Short-Term Bond Index Fund 5 Investment Advisor 29
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Intermediate-Term Bond Index Fund 9 Dividends, Capital Gains, and Taxes 30
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Long-Term Bond Index Fund 13 Share Price 31
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Investing in Index Funds 17 Financial Highlights 32
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 Investing With Vanguard 37
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 Accessing Fund Information by Computer 39
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 Glossary of Investment Terms 40
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This prospectus offers the Funds' Investor Shares and is intended for participants in employer-sponsored retirement or savings plans. Another version--for investors who would like to open a personal investment account--can be obtained by calling Vanguard at 800-662-7447.

An investment in a Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Company or any other government agency.

FUND PROFILE--VANGUARD TOTAL BOND MARKET INDEX FUND

Investment Objective
The Fund seeks to track the performance of a broad, market-weighted bond index.

Primary Investment Strategies

Performance/Risk Information
The following bar chart and table are intended to help you understand the risks of investing in the Fund. The bar chart shows how the performance of the Fund's Investor Shares has varied from one calendar year to another over the periods shown. The table shows how the average annual total returns compare with those of the Fund's target index. Keep in mind that the Fund's past performance does not indicate how the Fund will perform in the future.

Annual Total Returns--Investor Shares
------------------------------------------------------------
[Bar Chart Range: 40% to -20%]
1998 8.58%
1999 -0.76
2000 11.39
2001 8.43
2002 8.26
2003 3.97
2004 4.24
2005 2.40
2006 4.27
2007 6.92
------------------------------------------------------------

Average Annual Total Returns for Periods Ended December 31, 2007
 1 Year 5 Years 10 Years
---------------------------------------------------------------------------------
Vanguard Total Bond Market Index Fund Investor Shares 6.92% 4.35% 5.71%
---------------------------------------------------------------------------------
Lehman Brothers U.S. Aggregate Bond Index
(reflects no deduction for fees or expenses) 6.97% 4.42% 5.97%
---------------------------------------------------------------------------------

Fees and Expenses

Shareholder Fees
(Fees paid directly from your investment)
-------------------------------------------------------------------------
Sales Charge (Load) Imposed on Purchases None
-------------------------------------------------------------------------
Transaction Fee on Purchases None/1/
-------------------------------------------------------------------------
Sales Charge (Load) Imposed on Reinvested Dividends None
-------------------------------------------------------------------------
Redemption Fee None
-------------------------------------------------------------------------


Annual Fund Operating Expenses
(Expenses deducted from the Fund's assets)
-------------------------------------------------------------------------
Management Expenses 0.16%
-------------------------------------------------------------------------
12b-1 Distribution Fee None
-------------------------------------------------------------------------
Other Expenses 0.03%
-------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.19%
-------------------------------------------------------------------------
1 A portfolio transaction fee of 0.18% may apply to aggregate purchases of more than $500 million by a single investor.

The following example is intended to help you compare the cost of investing in the Fund's Investor Shares with the cost of investing in other mutual funds. It illustrates the hypothetical expenses that you would incur over various periods if you invest $10,000 in the Fund's shares. This example assumes that the Shares provide a return of 5% a year and that operating expenses remain the same. The results apply whether or not you redeem your investment at the end of the given period.

1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------
$19 $61 $107 $243
--------------------------------------------------------

This example should not be considered to represent actual expenses or performance from the past or for the future. Actual future expenses may be higher or lower than those shown.

Additional Information
As of December 31, 2007
-----------------------------------------------------------------------------------------------
Net Assets (all share classes) $55.8 billion
-----------------------------------------------------------------------------------------------
Investment Advisor The Vanguard Group, Inc., Valley Forge, Pa., since inception
-----------------------------------------------------------------------------------------------
Dividends and Capital Gains Dividends are declared daily and distributed on the first
 business day of each month; capital gains, if any, are
 distributed annually in December.
-----------------------------------------------------------------------------------------------
Inception Date December 11, 1986
-----------------------------------------------------------------------------------------------
Newspaper Abbreviation TotBd
-----------------------------------------------------------------------------------------------
Vanguard Fund Number 84
-----------------------------------------------------------------------------------------------
CUSIP Number 921937108
-----------------------------------------------------------------------------------------------
Ticker Symbol VBMFX
-----------------------------------------------------------------------------------------------

FUND PROFILE--VANGUARD SHORT-TERM BOND INDEX FUND

Investment Objective
The Fund seeks to track the performance of a market-weighted bond index with a short-term dollar-weighted average maturity.

Primary Investment Strategies

Primary Risks
The Fund is designed for investors with a low tolerance for risk, but you could still lose money by investing in it. The Fund's performance could be hurt by:

Performance/Risk Information
The following bar chart and table are intended to help you understand the risks of investing in the Fund. The bar chart shows how the performance of the Fund's Investor Shares has varied from one calendar year to another over the periods shown. The table shows how the average annual total returns compare with those of the Fund's target index. Keep in mind that the Fund's past performance does not indicate how the Fund will perform in the future.

Annual Total Returns--Investor Shares
------------------------------------------------------------
[Bar Chart Range: 40% to -20%]
1998 7.63%
1999 2.08
2000 8.84
2001 8.88
2002 6.10
2003 3.37
2004 1.70
2005 1.31
2006 4.09
2007 7.22
------------------------------------------------------------

Average Annual Total Returns for Periods Ended December 31, 2007
 1 Year 5 Years 10 Years
-------------------------------------------------------------------------------------
Vanguard Short-Term Bond Index Fund Investor Shares 7.22% 3.52% 5.08%
-------------------------------------------------------------------------------------
Lehman Brothers 1-5 Year U.S. Government/Credit Index
(reflects no deduction for fees or expenses) 7.27 3.60 5.35
-------------------------------------------------------------------------------------

Fees and Expenses

Shareholder Fees
(Fees paid directly from your investment)
----------------------------------------------------------------------------
Sales Charge (Load) Imposed on Purchases None
----------------------------------------------------------------------------
Transaction Fee on Purchases None/1/
----------------------------------------------------------------------------
Sales Charge (Load) Imposed on Reinvested Dividends None
----------------------------------------------------------------------------
Redemption Fee None
----------------------------------------------------------------------------


Annual Fund Operating Expenses
(Expenses deducted from the Fund's assets)
----------------------------------------------------------------------------
Management Expenses 0.15%
----------------------------------------------------------------------------
12b-1 Distribution Fee None
----------------------------------------------------------------------------
Other Expenses 0.03%
----------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.18%
----------------------------------------------------------------------------
1 A portfolio transaction fee of 0.15% may apply to aggregate purchases of more
 than $100 million by a single investor.

1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------
$18 $58 $101 $230
--------------------------------------------------------

This example should not be considered to represent actual expenses or performance from the past or for the future. Actual future expenses may be higher or lower than those shown.

Additional Information
As of December 31, 2007
----------------------------------------------------------------------------------------------
Net Assets (all share classes) $6.5 billion
----------------------------------------------------------------------------------------------
Investment Advisor The Vanguard Group, Inc., Valley Forge, Pa.,since inception
----------------------------------------------------------------------------------------------
Dividends and Capital Gains Dividends are declared daily and distributed on the first
 business day of each month; capital gains, if any, are
 distributed annually in December.
----------------------------------------------------------------------------------------------
Inception Date March 1, 1994
----------------------------------------------------------------------------------------------
Newspaper Abbreviation STBond
----------------------------------------------------------------------------------------------
Vanguard Fund Number 132
----------------------------------------------------------------------------------------------
CUSIP Number 921937207
----------------------------------------------------------------------------------------------
Ticker Symbol VBISX
----------------------------------------------------------------------------------------------

FUND PROFILE--VANGUARD INTERMEDIATE-TERM BOND INDEX FUND

Investment Objective
The Fund seeks to track the performance of a market-weighted bond index with an intermediate-term dollar-weighted average maturity.

Primary Investment Strategies

The Fund invests by sampling the Index, meaning that it holds a range of securities that, in the aggregate, approximates the full Index in terms of key risk factors and other characteristics. All of the Fund's investments will be selected through the sampling process, and at least 80% of the Fund's assets will be invested in bonds held in the Index. The Fund maintains a dollar-weighted average maturity consistent with that of the Index, which generally ranges between 5 and 10 years and, as of December 31, 2007, was 7.5 years. For additional information on the Fund's investment strategies, see More on the Funds.

. Interest rate risk, which is the chance that bond prices overall will decline because of rising interest rates. Interest rate risk should be moderate for the Fund because it invests mainly in intermediate-term bonds, whose prices are less sensitive to interest rate changes than are the prices of long-term bonds.

Performance/Risk Information
The following bar chart and table are intended to help you understand the risks of investing in the Fund. The bar chart shows how the performance of the Fund's Investor Shares has varied from one calendar year to another over the periods shown. The table shows how the average annual total returns compare with those of the Fund's target index. Keep in mind that the Fund's past performance does not indicate how the Fund will perform in the future.

Annual Total Returns--Investor Shares
------------------------------------------------------------
[Bar Chart Range: 40% to -20%]
1998 10.09%
1999 -3.00
2000 12.78
2001 9.28
2002 10.85
2003 5.65
2004 5.22
2005 1.75
2006 3.91
2007 7.61
------------------------------------------------------------

Average Annual Total Returns for Periods Ended December 31, 2007
 1 Year 5 Years 10 Years
--------------------------------------------------------------------------------------------
Vanguard Intermediate-Term Bond Index Fund Investor Shares 7.61% 4.81% 6.32%
--------------------------------------------------------------------------------------------
Lehman Brothers 5-10 Year U.S. Government/Credit Index
(reflects no deduction for fees or expenses) 7.55% 4.87% 6.50%
--------------------------------------------------------------------------------------------

Fees and Expenses

Shareholder Fees
(Fees paid directly from your investment)
---------------------------------------------------------------------------
Sales Charge (Load) Imposed on Purchases None
---------------------------------------------------------------------------
Transaction Fee on Purchases None/1/
---------------------------------------------------------------------------
Sales Charge (Load) Imposed on Reinvested Dividends None
---------------------------------------------------------------------------
Redemption Fee None
---------------------------------------------------------------------------


Annual Fund Operating Expenses
(Expenses deducted from the Fund's assets)
---------------------------------------------------------------------------
Management Expenses 0.15%
---------------------------------------------------------------------------
12b-1 Distribution Fee None
---------------------------------------------------------------------------
Other Expenses 0.03%
---------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.18%
---------------------------------------------------------------------------
1 A portfolio transaction fee of 0.23% may apply to aggregate purchases of more than $100 million by a single investor.

1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------
$18 $58 $101 $230
--------------------------------------------------------

This example should not be considered to represent actual expenses or performance from the past or for the future. Actual future expenses may be higher or lower than those shown.

Additional Information
As of December 31, 2007
-----------------------------------------------------------------------------------------------
Net Assets (all share classes) $7.2 billion
-----------------------------------------------------------------------------------------------
Investment Advisor The Vanguard Group, Inc., Valley Forge, Pa., since inception
-----------------------------------------------------------------------------------------------
Dividends and Capital Gains Dividends are declared daily and distributed on the first
 business day of each month; capital gains, if any, are
 distributed annually in December.
-----------------------------------------------------------------------------------------------
Inception Date March 1, 1994
-----------------------------------------------------------------------------------------------
Newspaper Abbreviation ITBond
-----------------------------------------------------------------------------------------------
Vanguard Fund Number 314
-----------------------------------------------------------------------------------------------
CUSIP Number 921937306
-----------------------------------------------------------------------------------------------
Ticker Symbol VBIIX
-----------------------------------------------------------------------------------------------

FUND PROFILE--VANGUARD LONG-TERM BOND INDEX FUND

Investment Objective
The Fund seeks to track the performance of a market-weighted bond index with a long-term dollar-weighted average maturity.

Primary Investment Strategies

The Fund invests by sampling the Index, meaning that it holds a range of securities that, in the aggregate, approximates the full Index in terms of key risk factors and other characteristics. All of the Fund's investments will be selected through the sampling process, and at least 80% of the Fund's assets will be invested in bonds held in the Index. The Fund maintains a dollar-weighted average maturity consistent with that of the Index, which generally ranges between 15 and 30 years and, as of December 31, 2007, was 20.6 years. For additional information on the Fund's investment strategies, see More on the Funds.

. Income risk, which is the chance that the Fund's income will decline because of falling interest rates. Income risk is generally low for long-term bond funds.

Performance/Risk Information
The following bar chart and table are intended to help you understand the risks of investing in the Fund. The bar chart shows how the performance of the Fund's Investor Shares has varied from one calendar year to another over the periods shown. The table shows how the average annual total returns compare with those of the Fund's target index. Keep in mind that the Fund's past performance does not indicate how the Fund will perform in the future.

Annual Total Returns--Investor Shares
------------------------------------------------------------
[Bar Chart Range: 40% to -20%]
1998 11.98%
1999 -7.85
2000 16.64
2001 8.17
2002 14.35
2003 5.50
2004 8.40
2005 5.32
2006 2.67
2007 6.59
------------------------------------------------------------

Average Annual Total Returns for Periods Ended December 31, 2007
 1 Year 5 Years 10 Years
----------------------------------------------------------------------------------------
Vanguard Long-Term Bond Index Fund Investor Shares 6.59% 5.68% 6.97%
----------------------------------------------------------------------------------------
Lehman Brothers U.S. Long Government/Credit Index
(reflects no deduction for fees or expenses) 6.60 5.80 6.95
----------------------------------------------------------------------------------------

Fees and Expenses

Shareholder Fees
(Fees paid directly from your investment)
-------------------------------------------------------------------------
Sales Charge (Load) Imposed on Purchases None
-------------------------------------------------------------------------
Transaction Fee on Purchases None/1/
-------------------------------------------------------------------------
Sales Charge (Load) Imposed on Reinvested Dividends None
-------------------------------------------------------------------------
Redemption Fee None
-------------------------------------------------------------------------


Annual Fund Operating Expenses
(Expenses deducted from the Fund's assets)
-------------------------------------------------------------------------
Management Expenses 0.15%
-------------------------------------------------------------------------
12b-1 Distribution Fee None
-------------------------------------------------------------------------
Other Expenses 0.03%
-------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.18%
-------------------------------------------------------------------------
1 A portfolio transaction fee of 0.21% may apply to aggregate purchases of more than $100 million by a single investor.

1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------
$18 $58 $101 $230
--------------------------------------------------------

This example should not be considered to represent actual expenses or performance from the past or for the future. Actual future expenses may be higher or lower than those shown.

Additional Information
As of December 31, 2007
-----------------------------------------------------------------------------------------------
Net Assets (all share classes) $2.8 billion
-----------------------------------------------------------------------------------------------
Investment Advisor The Vanguard Group, Inc., Valley Forge, Pa., since inception
-----------------------------------------------------------------------------------------------
Dividends and Capital Gains Dividends are declared daily and distributed on the first
 business day of each month; capital gains, if any, are
 distributed annually in December.
-----------------------------------------------------------------------------------------------
Inception Date March 1, 1994
-----------------------------------------------------------------------------------------------
Newspaper Abbreviation LTBond
-----------------------------------------------------------------------------------------------
Vanguard Fund Number 522
-----------------------------------------------------------------------------------------------
CUSIP Number 921937405
-----------------------------------------------------------------------------------------------
Ticker Symbol VBLTX
-----------------------------------------------------------------------------------------------

INVESTING IN INDEX FUNDS

Index funds typically have the following characteristics:

. Variety of investments. Most Vanguard index funds generally invest in the securities of a wide variety of companies and industries.

. Relative performance consistency. Because they seek to track market benchmarks, index funds usually do not perform dramatically better or worse than their benchmarks.

MORE ON THE FUNDS

Market Exposure

How Interest Rate Changes Affect the Value of a $1,000 Bond/1/
 After a 1% After a 1% After a 2% After a 2%
Type of Bond (Maturity) Increase Decrease Increase Decrease
------------------------------------------------------------------------------
Short-Term (2.5 years) $977 $1,024 $955 $1,048
------------------------------------------------------------------------------
Intermediate-Term (10 years) 926 1,082 858 1,172
------------------------------------------------------------------------------
Long-Term (20 years) 884 1,137 786 1,299
------------------------------------------------------------------------------
1 Assuming a 5% coupon.

These figures are for illustration only; you should not regard them as an indication of future performance of the bond market as a whole or the Funds in particular.

Plain Talk About Bonds and Interest Rates

Changes in interest rates can affect bond income as well as bond prices.

Plain Talk About Bond Maturities

Although falling interest rates tend to strengthen bond prices, they can cause other sorts of problems for bond fund investors--bond calls and prepayments.

Because the Total Bond Market Index Fund invests only a portion of its assets in callable bonds and mortgage-backed securities, call/prepayment risk for the Fund should be moderate.

Plain Talk About Credit Quality

 Average Credit Quality
Fund Fund's Holdings Target Index
---------------------------------------------------------------
Total Bond Market Index Aa1 Aa1
---------------------------------------------------------------
Short-Term Bond Index Aa1 Aa1
---------------------------------------------------------------
Intermediate-Term Bond Index Aa2 Aa2
---------------------------------------------------------------
Long-Term Bond Index Aa2 Aa2
---------------------------------------------------------------

The Funds are generally managed without regard to tax ramifications.

The following summary table is provided to help you distinguish among the Funds and their various risks.

 Risks of the Funds
 Interest Call/ Index
 Income Rate Prepayment Credit Sampling
Fund Risk Risk Risk Risk Risk
-------------------------------------------------------------------------------
Total Bond Market Index Moderate Moderate Moderate Low Low
-------------------------------------------------------------------------------
Short-Term Bond Index High Low Low Low Low
-------------------------------------------------------------------------------
Intermediate-Term Bond Moderate Moderate Low Low Low
Index
-------------------------------------------------------------------------------
Long-Term Bond Index Low High Low Low Low
-------------------------------------------------------------------------------

Security Selection

The following table shows the number of bonds held by each Fund, as well as the number of bonds in each Fund's target index, as of December 31, 2007.

 Number of Number of Bonds in
Fund Bonds Held Target Index
-------------------------------------------------------------------
Total Bond Market Index 3,157 9,193
-------------------------------------------------------------------
Short-Term Bond Index 816 1,821
-------------------------------------------------------------------
Intermediate-Term Bond Index 920 1,424
-------------------------------------------------------------------
Long-Term Bond Index 777 1,083
-------------------------------------------------------------------

As of December 31, 2007, each Fund was composed of the following types of bonds:

 International
 U.S. Mortgage- Dollar- Short-Term
Fund Government Corporate Backed Denominated Reserves Total
---------------------------------------------------------------------------------------------------
Total Bond Market Index 34% 25% 38% 2% 1% 100%
---------------------------------------------------------------------------------------------------
Short-Term Bond Index 68 27 0 5 0 100
---------------------------------------------------------------------------------------------------
Intermediate-Term
Bond Index 52 41 0 6 1 100
---------------------------------------------------------------------------------------------------
Long-Term Bond Index 49 46 0 5 0 100
---------------------------------------------------------------------------------------------------

An explanation of each type of bond follows.

Plain Talk About U.S. Government-Sponsored Entities

Other Investment Policies and Risks

Each Fund will invest at least 80% of its assets in bonds held in its target index. Up to 20% of each Fund's assets may be used to purchase nonpublic, investment-grade securities, generally referred to as 144A securities, as well as smaller public issues or medium-term notes not included in the index because of the small size of the issue. The vast majority of these securities will have characteristics and risks similar to those in the target indexes. Subject to the same 20% limit, the Funds may also purchase other investments that are outside of their target indexes or may hold bonds that, when acquired, were included in the index but subsequently were removed. The Funds may also invest in relatively conservative classes of collateralized mortgage obligations (CMOs), which offer a high degree of cash-flow predictability and a low level of vulnerability to mortgage prepayment risk. To reduce credit risk, these less-risky classes of CMOs are purchased only if they are issued by agencies of the U.S. government or issued by private companies that carry high-quality investment-grade ratings.

Each Fund reserves the right to substitute a different index for the index it currently tracks if the current index is discontinued, if the Fund's agreement with the sponsor of

its target index is terminated, or for any other reason determined in good faith by the Fund's board of trustees. In any such instance, the substitute index would measure the same market segment as the current index.

[FLAG]
Each Fund may invest in derivatives. In general, derivatives may involve risks different from, and possibly greater than, those of the underlying securities, assets, or market indexes.

Generally speaking, a derivative is a financial contract whose value is based on the value of a financial asset (such as a stock, bond, or currency), a physical asset (such as gold), or a market index (such as the S&P 500 Index). The Funds may invest in derivatives only if the expected risks and rewards of the derivatives are consistent with the investment objective, policies, strategies, and risks of the Fund as disclosed in this prospectus. The advisor will not use derivatives to change the risks of the Fund as a whole as such risks are disclosed in this prospectus. In particular, derivatives will be used only where they may help the advisor:

. Invest in eligible asset classes with greater efficiency and lower cost than is possible through direct investment;

. Add value when these instruments are attractively priced; or

. Adjust sensitivity to changes in interest rates.

Plain Talk About Derivatives

reduce the Fund's transaction costs or add value because the instruments are favorably priced. Vanguard receives no additional revenue from investing Fund assets in Vanguard bond ETFs because Fund assets invested in ETF Shares are excluded when allocating to the Fund its share of the costs of Vanguard operations.

Cash Management

Frequent Trading or Market-Timing

Policies to Address Frequent Trading. The Vanguard funds (other than money market funds, short-term bond funds, and Vanguard ETF/ TM/ Shares) do not knowingly accommodate frequent trading. The board of trustees of each Vanguard fund has adopted policies and procedures reasonably designed to detect and discourage frequent trading and, in some cases, to compensate the fund for the costs associated with it. Although there is no assurance that Vanguard will be able to detect or prevent frequent trading or market-timing in all circumstances, the following policies have been adopted to address these issues:

. Each Vanguard fund (other than money market funds, short-term bond funds, and ETF Shares) generally prohibits, except as otherwise noted in the Investing With Vanguard section, a participant from exchanging into a fund account for 60 calendar days after the participant exchanged out of that fund account.

. Certain Vanguard funds charge shareholders purchase and/or redemption fees on transactions.

See the Investing With Vanguard section of this prospectus for further details on Vanguard's transaction policies.

Do not invest with Vanguard if you are a market-timer.

Plain Talk About Costs of Investing

Turnover Rate

Plain Talk About Turnover Rate

Before investing in a mutual fund, you should review its turnover rate. This gives an indication of how transaction costs, which are not included in the fund's expense ratio, could affect the fund's future returns. In general, the greater the volume of buying and selling by the fund, the greater the impact that dealer markups and other transaction costs will have on its return. Also, funds with high turnover rates may be more likely to generate capital gains that must be distributed to shareholders as taxable income.

THE FUNDS AND VANGUARD

Plain Talk About Vanguard's Unique Corporate Structure The Vanguard Group is truly a mutual mutual fund company. It is owned jointly by the funds it oversees and thus indirectly by the shareholders in those funds. Most other mutual funds are operated by management companies that may be owned by one person, by a group of individuals, or by investors who own the management company's stock. The management fees charged by these companies include a profit component over and above the companies' cost of providing services. By contrast, Vanguard provides services to its member funds on an at-cost basis, with no profit component, which helps to keep the funds' expenses low.

INVESTMENT ADVISOR

The Vanguard Group, Inc. (Vanguard), P.O. Box 2600, Valley Forge, PA 19482, which began operations in 1975, serves as advisor to the Funds through its Fixed Income Group. As of December 31, 2007, Vanguard served as advisor for approximately
$1 trillion in assets. Vanguard manages the Funds on an at-cost basis, subject to the supervision and oversight of the trustees and officers of the Funds.

For the fiscal year ended December 31, 2007, the advisory expenses represented an effective annual rate of 0.01% of each Fund's average net assets.

For a discussion of why the board of trustees approved each Fund's investment advisory arrangement, see the most recent semiannual report to shareholders covering the fiscal period ended June 30.

George U. Sauter is Chief Investment Officer and Managing Director of Vanguard. As Chief Investment Officer, he is responsible for the oversight of Vanguard's Quantitative Equity and Fixed Income Groups. The investments managed by these two groups include active quantitative equity funds, equity index funds, active bond funds, index bond funds, stable value portfolios, and money market funds. Since joining Vanguard in 1987, Mr. Sauter has been a key contributor to the development of Vanguard's stock indexing and active quantitative equity investment strategies. He received his A.B. in Economics from Dartmouth College and an M.B.A. in Finance from the University of Chicago.

Plain Talk About the Funds' Portfolio Managers

The managers primarily responsible for the day-to-day management of the Funds are:

Kenneth E. Volpert, CFA, Principal of Vanguard and head of Vanguard's Taxable Bond Group. He has managed investment portfolios since 1982; has been with Vanguard since 1992; managed the Total Bond Market Index Fund since 1992 (co-managed since 2008); managed the Intermediate-Term Bond Index Fund since its inception (co-managed since 2008); and managed the Long-Term Bond Index Fund since 2005 ( co-managed since 2008). Education: B.S., University of Illinois; M.B.A., University of Chicago.

The Statement of Additional Information provides information about each portfolio manager's compensation, other accounts under management, and ownership of securities in the Funds.

DIVIDENDS, CAPITAL GAINS, AND TAXES

Each Fund distributes to shareholders virtually all of its net income (interest less expenses) as well as any net capital gains realized from the sale of its holdings. The Fund's income dividends accrue daily and are distributed on the first business day of every month; capital gains distributions generally occur annually in December. In addition, the Funds may occasionally be required to make supplemental distributions at some other time during the year.

Your distributions will be reinvested in additional Fund shares and accumulate on a tax-deferred basis if you are investing through an employer-sponsored retirement or savings plan. You will not owe taxes on these distributions until you begin withdrawals from the plan. You should consult your plan administrator, your plan's Summary Plan Description, or your tax advisor about the tax consequences of plan withdrawals.

Plain Talk About Distributions

SHARE PRICE

Vanguard fund share prices can be found daily in the mutual fund listings of most major newspapers under various "Vanguard" headings.

FINANCIAL HIGHLIGHTS

The following financial highlights tables are intended to help you understand the Investor Shares' financial performance for the periods shown, and certain information reflects financial results for a single Investor Share. The total returns in each table represent the rate that an investor would have earned or lost each period on an investment in the Investor Shares (assuming reinvestment of all distributions). This information has been derived from the financial statements audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, whose report--along with each Fund's financial statements--is included in the Funds' most recent annual report to shareholders. To receive a free copy of the latest annual or semiannual report, you may access a report online at www.vanguard.com, or you may contact Vanguard by telephone or by mail.

Plain Talk About How to Read the Financial Highlights Tables

Shareholders received $0.501 per share in the form of dividend distributions. A portion of each year's distributions may come from the prior year's income or capital gains.

Total Bond Market Index Fund Investor Shares
 Year Ended December 31,
 ------------------------------------------------------------
 2007 2006 2005 2004 2003
--------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $9.99 $10.06 $10.27 $10.31 $10.38
--------------------------------------------------------------------------------------------------------------------------
Investment Operations
--------------------------------------------------------------------------------------------------------------------------
Net Investment Income .501 .485 .446 .441 .465
--------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss)
on Investments .170 (.070) (.205) (.014) (.060)
--------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations .671 .415 .241 .427 .405
--------------------------------------------------------------------------------------------------------------------------
Distributions
--------------------------------------------------------------------------------------------------------------------------
Dividends from Net Investment Income (.501) (.485) (.449) (.446) (.475)
--------------------------------------------------------------------------------------------------------------------------
Distributions from Realized Capital Gains -- -- (.002) (.021) --
--------------------------------------------------------------------------------------------------------------------------
Total Distributions (.501) (.485) (.451) (.467) (.475)
--------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $10.16 $9.99 $10.06 $10.27 $10.31
==========================================================================================================================
Total Return 6.92% 4.27% 2.40% 4.24% 3.97%
==========================================================================================================================
Ratios/Supplemental Data
--------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (Millions) $29,532 $23,769 $21,643 $19,479 $17,032
--------------------------------------------------------------------------------------------------------------------------
Ratio of Total Expenses to
Average Net Assets 0.19% 0.20% 0.20% 0.20% 0.22%
--------------------------------------------------------------------------------------------------------------------------
Ratio of Net Investment Income to
Average Net Assets 5.02% 4.88% 4.40% 4.29% 4.46%
--------------------------------------------------------------------------------------------------------------------------
Turnover Rate(1) 54% 63% 59% 59% 89%
==========================================================================================================================
1 Excludes the value of portfolio securities received or delivered as a result
 of in-kind purchases or redemptions of the Fund's capital shares, including
 ETF Creation Units.

Short-Term Bond Index Fund Investor Shares
 Year Ended December 31,
 ------------------------------------------------------------
 2007 2006 2005 2004 2003
--------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $9.89 $9.92 $10.14 $10.28 $10.32
--------------------------------------------------------------------------------------------------------------------------
Investment Operations
--------------------------------------------------------------------------------------------------------------------------
Net Investment Income .456 .426 .350 .303 .329
--------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss)
on Investments .240 (.030) (.220) (.131) .015
--------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations .696 .396 .130 .172 .344
--------------------------------------------------------------------------------------------------------------------------
Distributions
--------------------------------------------------------------------------------------------------------------------------
Dividends from Net Investment Income (.456) (.426) (.350) (.303) (.329)
--------------------------------------------------------------------------------------------------------------------------
Distributions from Realized Capital Gains -- -- -- (.009) (.055)
--------------------------------------------------------------------------------------------------------------------------
Total Distributions (.456) (.426) (.350) (.312) (.384)
--------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $10.13 $9.89 $9.92 $10.14 $10.28
==========================================================================================================================
Total Return 7.22% 4.09% 1.31% 1.70% 3.37%
==========================================================================================================================
Ratios/Supplemental Data
--------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (Millions) $2,773 $2,731 $2,951 $3,795 $3,041
--------------------------------------------------------------------------------------------------------------------------
Ratio of Total Expenses to
Average Net Assets 0.18% 0.18% 0.18% 0.18% 0.20%
--------------------------------------------------------------------------------------------------------------------------
Ratio of Net Investment Income to
Average Net Assets 4.58% 4.32% 3.50% 2.97% 3.17%
--------------------------------------------------------------------------------------------------------------------------
Turnover Rate(1) 79% 106% 106% 92% 111%
==========================================================================================================================
1 Excludes the value of portfolio securities received or delivered as a result
 of in-kind purchases or redemptions of the Fund's capital shares, including
 ETF Creation Units.

Intermediate-Term Bond Index Fund Investor Shares
 Year Ended December 31,
 ------------------------------------------------------------
 2007 2006 2005 2004 2003
--------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $10.25 $10.36 $10.68 $10.69 $10.75
--------------------------------------------------------------------------------------------------------------------------
Investment Operations
--------------------------------------------------------------------------------------------------------------------------
Net Investment Income .507 .499 .492 .506 .532
--------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss)
on Investments .250 (.110) (.309) .038 .064
--------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations .757 .389 .183 .544 .596
--------------------------------------------------------------------------------------------------------------------------
Distributions
--------------------------------------------------------------------------------------------------------------------------
Dividends from Net Investment Income (.507) (.499) (.492) (.506) (.532)
--------------------------------------------------------------------------------------------------------------------------
Distributions from Realized Capital Gains -- -- (.011) (.048) (.124)
--------------------------------------------------------------------------------------------------------------------------
Total Distributions (.507) (.499) (.503) (.554) (.656)
--------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $10.50 $10.25 $10.36 $10.68 $10.69
==========================================================================================================================
Total Return 7.61% 3.91% 1.75% 5.22% 5.65%
==========================================================================================================================
Ratios/Supplemental Data
--------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (Millions) $3,020 $2,929 $3,009 $3,501 $2,749
--------------------------------------------------------------------------------------------------------------------------
Ratio of Total Expenses to
Average Net Assets 0.18% 0.18% 0.18% 0.18% 0.20%
--------------------------------------------------------------------------------------------------------------------------
Ratio of Net Investment Income to
Average Net Assets 4.74% 4.91% 4.68% 4.75% 4.91%
--------------------------------------------------------------------------------------------------------------------------
Turnover Rate(1) 72% 86% 76% 84% 98%
==========================================================================================================================
1 Excludes the value of portfolio securities received or delivered as a result
 of in-kind purchases or redemptions of the Fund's capital shares, including
 ETF Creation Units.

Long-Term Bond Index Fund Investor Shares
 Year Ended December 31,
 ------------------------------------------------------------
 2007 2006 2005 2004 2003
--------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $11.53 $11.84 $11.82 $11.50 $11.67
--------------------------------------------------------------------------------------------------------------------------
Investment Operations
--------------------------------------------------------------------------------------------------------------------------
Net Investment Income .613 .603 .601 .617 .627
--------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss)
on Investments .120 (.310) .020 .320 .004
--------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations .733 .293 .621 .937 .631
--------------------------------------------------------------------------------------------------------------------------
Distributions
--------------------------------------------------------------------------------------------------------------------------
Dividends from Net Investment Income (.613) (.603) (.601) (.617) (.627)
--------------------------------------------------------------------------------------------------------------------------
Distributions from Realized Capital Gains -- -- -- -- (.174)
--------------------------------------------------------------------------------------------------------------------------
Total Distributions (.613) (.603) (.601) (.617) (.801)
--------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $11.65 $11.53 $11.84 $11.82 $11.50
==========================================================================================================================
Total Return 6.59% 2.67% 5.32% 8.40% 5.50%
==========================================================================================================================
Ratios/Supplemental Data
--------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (Millions) $2,277 $1,898 $1,893 $1,310 $951
--------------------------------------------------------------------------------------------------------------------------
Ratio of Total Expenses to
Average Net Assets 0.18% 0.18% 0.18% 0.18% 0.20%
--------------------------------------------------------------------------------------------------------------------------
Ratio of Net Investment Income to
Average Net Assets 5.34% 5.30% 5.03% 5.34% 5.34%
--------------------------------------------------------------------------------------------------------------------------
Turnover Rate(1) 62% 55% 52% 62% 76%
==========================================================================================================================
1 Excludes the value of portfolio securities received or delivered as a result
 of in-kind purchases or redemptions of the Fund's capital shares, including
 ETF Creation Units.

INVESTING WITH VANGUARD

One or more of the Funds are an investment option in your retirement or savings plan. Your plan administrator or your employee benefits office can provide you with detailed information on how to participate in your plan and how to elect a Fund as an investment option.

. If you have any questions about a Fund or Vanguard, including those about a Fund's investment objective, strategies, or risks, contact Vanguard's Participant Access Center, toll-free, at 800-523-1188.

. If you have questions about your account, contact your plan administrator or the organization that provides recordkeeping services for your plan.

. Be sure to carefully read each topic that pertains to your transactions with Vanguard.

. Vanguard reserves the right to change these policies without prior notice to shareholders.

Investment Options and Allocations
Your plan's specific provisions may allow you to change your investment selections, the amount of your contributions, or how your contributions are allocated among the investment choices available to you. Contact your plan administrator or employee benefits office for more details.

Transactions
Contribution, exchange, or redemption requests must be in good order. Good order means that your request includes complete information on your contribution, exchange, or redemption, and that Vanguard has received the appropriate assets.

In all cases, your transaction will be based on the Fund's next-determined NAV after Vanguard receives your request (or, in the case of new contributions, the next-determined NAV after Vanguard receives the order from your plan administrator). As long as this request is received before the close of trading on the New York Stock Exchange (generally 4 p.m., Eastern time), you will receive that day's NAV. This is known as your trade date.

You begin earning dividends on the next business day after your contribution trade date. Shares continue earning dividends until the next business day after your exchange or redemption trade date.

Exchanges
The exchange privilege (your ability to redeem shares from one fund to purchase shares of another fund) may be available to you through your plan. Although we make every effort to maintain the exchange privilege, Vanguard reserves the right to revise or terminate this privilege, limit the amount of an exchange, or reject any exchange, at any time, without notice. Because excessive exchanges can disrupt the management

of the Vanguard funds and increase their transaction costs, Vanguard places certain limits on the exchange privilege.

If you are exchanging out of any Vanguard fund (other than money market funds and short-term bond funds), the following policy applies, regardless of the dollar amount:

. You must wait 60 days before exchanging back into the fund. The 60-day clock restarts after every exchange out of the fund.

The policy does not apply to the following:

. Exchange requests submitted by mail to Vanguard. (Exchange requests submitted by fax or wire are not mail requests and remain subject to the policy.)

. Purchases of shares with participant payroll or employer contributions or loan repayments.

. Purchases of shares with reinvested dividend or capital gains distributions.

. Distributions, loans, and in-service withdrawals from a plan.

. Redemptions of shares as part of a plan termination or at the direction of the plan.

. Redemptions of shares to pay fund or account fees.

. Share or asset transfers or rollovers.

. Re-registrations of shares within the same fund.

. Conversions of shares from one share class to another in the same fund.

. Automated transactions executed during the first six months of a participant's enrollment in the Vanguard Managed Account Program.

Before making an exchange to or from another fund available in your plan, consider
the following:

. Certain investment options, particularly funds made up of company stock or investment contracts, may be subject to unique restrictions.

. Be sure to read that fund's prospectus. Contact Vanguard's Participant Access Center, toll-free, at 800-523-1188 for a copy.

. Vanguard can accept exchanges only as permitted by your plan. Contact your plan administrator for details on other exchange policies that apply to your plan.

Plans for which Vanguard does not serve as recordkeeper: If Vanguard does not serve as recordkeeper for your plan, your plan's recordkeeper will establish accounts in Vanguard funds. In such accounts, we cannot always monitor the trading activity of individual clients. However, we review trading activity at the omnibus level, and if we detect suspicious activity, we will investigate and take appropriate action. If necessary, Vanguard may prohibit additional purchases of fund shares by an intermediary or by certain of the intermediary's clients. Intermediaries may also monitor participants' trading activity in the Vanguard funds.

For those Vanguard funds that charge purchase or redemption fees, intermediaries that establish accounts in the Vanguard funds will be asked to assess purchase and redemption fees on participant accounts and remit these fees to the funds. The application of purchase and redemption fees and frequent-trading policies may vary among intermediaries. There are no assurances that Vanguard will successfully identify all intermediaries or that intermediaries will properly assess purchase and redemption fees or administer frequent-trading policies. If a firm other than Vanguard serves as recordkeeper for your plan, please read that firm's materials carefully to learn of any other rules or fees that may apply.

Portfolio Holdings
We generally post on our website at www.vanguard.com, in the Holdings section of each Fund's Profile page, a detailed list of the securities held by the Fund (under Portfolio Holdings), as of the most recent calendar-quarter-end. This list is generally updated within 30 days after the end of each calendar quarter. Vanguard may exclude any portion of these portfolio holdings from publication when deemed in the best interest of the Fund. These postings generally remain until replaced by new postings as previously described. Please consult the Fund's Statement of Additional Information or our website for a description of the policies and procedures that govern disclosure of the Fund's portfolio holdings.

ACCESSING FUND INFORMATION BY COMPUTER

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