UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES

Item 1.  Reports to Stockholders.

REAVES UTILITY INCOME FUND

Semi-Annual Report

April 30, 2008
(unaudited)

shaReholdeR letteR

April 30, 2008 (unaudited)

Dear Shareholders:

The past few months presented challenges across our economy to which the Reaves Utility Income Fund (the “Fund”) has not been immune. For the six-month period ending on April 30, 2008, the Fund has delivered a total return on investment of -10.2% of net asset value per common share, with all dividends reinvested. Factoring in the stock price performance plus dividends, the Fund produced a total return of -8.5% during the period.

These returns reflect market turmoil related to the credit market and concern about inflation, among other factors. As detailed in the portfolio managers’ summary that follows, these factors put pressure on the price of equities in general and on high-yielding equities in particular. The highest yielding holdings in the Fund, the telephone and electric utility sectors, were particularly hard-hit, down about 10% and 6.8%, respectively.

The Fund’s price did see a significant rebound in April, rising from a low price of $20.71 on March 17, 2008 to finish the quarter at $22.70—an increase of more than 9.5%.

Additionally, current market conditions do not fundamentally impact the ability of companies owned by the Fund to pay dividends. Indeed, I am pleased to report the Fund increased its monthly dividend to common shareholders at the end of 2007 by 4.5% to 11.5 cents. In addition the Fund paid a special dividend of $0.71 at the end of 2007. The increases continue a pattern that has seen the Fund deliver dividend increases and special dividends each year since its inception. Shareholders invested in the Fund since the first dividend record date in April 2004 have received dividend payments totaling approximately $6.13 per share.

During the 2007 calendar year, 77.71% of those dividends have been qualified dividend income, which are taxed at a maximum 15% federal rate, as opposed to a rate as high as 35% for non-qualifying and other types of dividend income. This presents a significant tax advantage to our shareholders.

As detailed in their following commentary, which also includes full holdings and financial statements, the portfolio managers remain confident in the fundamentals supporting the Fund’s investments. Feel free to contact us with any questions about the Fund by calling 1-800-644-5571 or visiting www.utilityincomefund.com.

Thank you for being a shareholder.

Sincerely,

Ned Burke

President, Reaves Utility Income Fund

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management discUssion & analysis

April 30, 2008 (unaudited)

It may not have been quite the perfect storm that has roiled the equities markets since the end of October, but it has come close. After ending the fiscal year on October 31, 2007 at $26.26, the Fund’s market price declined 13.6% in value in the ensuing six months to close the first half of the fiscal year at $22.70. The total return for the same period, including reinvested dividends, however, was -8.5% and -10.1% based on the Fund’s market price and net asset value, respectively. That performance metric masks a significant rebound in April. From peak to trough, the Fund’s share price declined 21.4% from $26.34 on December 10, 2007 to $20.71 on March 17, 2008.

The current market turmoil, however, does not have a fundamental impact on the ability of companies owned by the Fund to pay and grow their dividends. Indeed, we are pleased to report that the Fund increased its monthly dividend to common shareholders at the end of 2007 by 4.5% to 11.5 cents. In addition, the Fund paid a special dividend of $0.71 at the end of 2007.

Several factors account for much of the carnage. First, the deepening crisis in the credit markets spilled over to equities as investors judged the impacts of the housing crisis and subsequent credit squeeze on the overall economy to be more severe than they had previously thought. Second, there was and continues to be more than a whiff of inflation in the air as commodity prices rose to record levels and investors worried about the possibility of rising raw materials costs rippling through the larger economy. Third, in our opinion, there was significant and ongoing de-leveraging by hedge funds and other highly levered investors. During periods of intense market turmoil, as we have recently experienced, investors “sell what they can” to raise cash. Fourth, we think we witnessed the unwinding of the yen-based carry trade. In this transaction, investors borrow at very low rates in Japan, convert the proceeds into US dollars, and invest in high-yielding instruments in the US. This trade becomes less profitable as the US dollar falls in value vs. the yen, which is exactly what happened throughout the fall and winter. Over the period, the US dollar fell 10.0% from 115.43 yen to the dollar to 103.91 yen to the dollar. Combined, these factors put pressure on the prices of equities in general and on high-yielding equities in particular, and we saw the impact on the Fund’s telephone and electric utility holdings. Indeed, these two sectors, the highest yielding in the Fund, were the hardest hit. In the Fund’s underlying portfolio, telephones were down about 10.0% and electrics were down about 6.8%.

To be sure, specific issues, linked to several companies in the underlying portfolio, also accounted for some of the decline. AT&T, the largest holding of the Fund, came under considerable selling pressure on fears of a price war among the major wireless providers. Those fears were stoked by Verizon’s decision to offer unlimited voice packages at $99 monthly and by the rapid decisions of AT&T and T-Mobile to follow suit. In our opinion, the sell-off in AT&T was overdone, and we think the price points were set high enough such that rational pricing will continue to prevail. The early results suggest that it has. BCE is another telephone holding whose share price declined dramatically in the period – from $43.61 to $36.48. The Ontario Teachers Pension Fund, with some private equity buyers, entered into an agreement with BCE to take the company private at CAD$42.75. Several major banks, including Citigroup, agreed to finance the acquisition. Terms were set several months before the sub-prime crisis broke. Investor concerns mounted throughout the spring that the bank syndicate would walk away from the deal. Several of the banks were involved in the Clear Channel Communications

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dispute. The situation continues to be in flux as of this writing. Subsequent to April 30, 2008, three of the four major banks in the syndicate did indeed press for more favorable terms. In an unrelated, but equally negative development, the Quebec Appellate Court ruled quite unexpectedly in favor of a group of bondholders who challenged the original transaction. The case is likely to end up in the Supreme Court of Canada. While the level of uncertainty has increased, we believe that a completed deal at a price higher than the current $35.24 is still more likely than not.

In the electric sector, the acquisition of the electric utility assets of Acquila, Inc. by Great Plains Energy, the largest electric holding of the Fund, ran into regulatory headwinds over the winter. The deal had been expected to close in February, but has been delayed as the company argued against additional concessions recommended by the Missouri Public Utility Commission staff. Because of the delay in the approval process, Great Plains delayed its filing of a rate case before the commission. The regulatory hurdles contributed to the selling pressure on the shares in our opinion. Nonetheless, we think the acquisition is in the best interests of the Missouri rate-payers, and we believe the company will prevail. A successful resolution of the issues could come as early as July 1 of this year.

In spite of the generally negative market conditions, to date we have observed no meaningful deterioration in the earnings growth outlook or the financial condition of the electric utilities and telecoms held by the Fund We expect most of the electric utilities in the portfolio to raise their dividends by as little as 4% to in excess of 14% for Constellation Energy. Likewise, we expect many of the telecoms in the portfolio to raise their dividends as well. AT&T, for example, raised its dividend 12.7% at the end of calendar 2007 from $1.42 to $1.60. Going forward, management expects dividend growth to be roughly commensurate with earnings growth.

Rising oil and natural gas prices helped buoy the performance of the Fund’s gas and energy holdings. Over the period, the price of oil (West Texas Intermediate) increased 20% from $94.53 to $113.46 per barrel while the price of natural gas (Henry Hub) soared 48% from $7.28 to $10.81 per million BTUs. The gas utilities sector was essentially flat as strong performance at Equitable Resources was offset by weakness in the shares of Sempra Energy. Investors began to appreciate the potential for material growth of gas reserves from shale for Equitable Resources. At the same time the market feared that the agreement between Sempra Energy and Royal Bank of Scotland, to form a joint venture between their commodity trading businesses, would not close because of the financial crisis. This concern proved unfounded and the deal, in fact, closed on April 1. Nonetheless, the uncertainty represented an overhang on the share price. We added to our Sempra holdings in the period given our expectation for Sempra to achieve double-digit earnings and dividend growth over the next 3 to 5 years. We remain positive on gas utilities and natural gas prices. The need for additional electric generation in the US, we believe, will be met primarily by gas-fired generation for some time to come.

In summary, the volatility since the market’s peak in October 2007 has not caused us to change our views of the fundamentals supporting the Fund’s investments. The need for significant investment in our energy infrastructure will motivate regulators and legislators to provide the rate support needed for selected utilities to finance construction of generation, transmission, distribution and pipelines. Clearly the US economy is slowing, and

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may even be in recession. However, a consumer-led recession will have little impact in our view on the longer-term investment requirement to refurbish the nation’s energy and communications infrastructure. We are beginning to be more concerned with inflation than recession. We have already mentioned rising commodity prices; and would note further that the yield on the ten-year Treasury has climbed back over 4% as of this writing. We are not unmindful of the adverse short-term impact of a rising interest rate environment on a utilities portfolio. We monitor the interest rate situation closely and are prepared to reposition the portfolio to take advantage of price dislocations should rates tick up above current expectations.

Recent disruptions caused by an imbalance between buy and sell orders in the market for auction rate securities in the U.S. have led to questions about the impact to closed-end funds. The Fund issued outstanding Auction Market Preferred Shares (“AMPS”) in June 2004. The AMPS issued by the Fund are senior equity securities and have priority over the Fund’s common shares as to distribution of assets and dividends, as described in the Fund’s AMPS prospectus.

Under normal auction market conditions, dividends on the AMPS for each dividend period are set at a rate determined through an auction process that brings together bidders who seek to buy AMPS and holders of AMPS who seek to sell. Investors and potential investors typically purchase the AMPS in an auction by submitting orders to a broker-dealer. However, as stated in the Fund’s prospectus, there may not be enough bids at the auction to accommodate all of the sellers. In such an unusual circumstance, which we are currently experiencing, the auction fails and the holders of the preferred shares receive an interest rate determined by terms specified in the prospectus: the greater of LIBOR plus 125 basis points or 125% of LIBOR.

As always we appreciate the support of our shareholders and remain focused on opportunities to grow the Fund’s net asset value and monthly dividend.

Sincerely,

Ronald J. Sorenson

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statement of investments

April 30, 2008 (unaudited)

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Ratings:

Moody’s and S&P’s ratings are believed to be the most recent as of April 30, 2008

See Notes to Financial Statements

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statement of assets & liabilities

April 30, 2008 (unaudited)

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statement of opeRations

For the Six Months Ended April 30, 2008 (unaudited)

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statements of changes in net assets

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Financial highlights

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See Notes to Financial Statements

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notes to Financial statements

April 30, 2008 (unaudited)

1. signiFicant accoUnting and opeRating policies

Reaves Utility Income Fund (the “Fund”) is a closed-end management investment company that was organized under the laws of the state of Delaware by an Agreement and Declaration of Trust dated September 15, 2003. The Fund is a non-diversified fund with an investment objective to provide a high level of after-tax income and total return consisting primarily of tax-advantaged dividend income and capital appreciation. The Declaration of Trust provides that the Trustees may authorize separate classes of shares of beneficial interest. The Fund commenced operations on February 24, 2004. The Fund’s common shares are listed on the American Stock Exchange and trade under the ticker symbol “UTG.”

The Fund may have elements of risk, including the risk of loss of equity. There is no assurance that the investment process will consistently lead to successful results. An investment concentrated in sectors and industries may involve greater risk and volatility than a more diversified investment.

The following summarizes the significant accounting policies of the Fund.

Security Valuation:  The net asset value per common share of the Fund is determined no less frequently than daily, on each day that the American Stock Exchange (the “Exchange”) is open for trading, as of the close of regular trading on the Exchange (normally 4:00 p.m. New York time). Securities held by the Fund for which exchange quotations are readily available are valued at the last sale price, or if no sale price or if traded on the over-the-counter market, at the mean of the bid and asked prices on such day. Debt securities for which the over-the-counter market is the primary market are normally valued on the basis of prices furnished by one or more pricing services at the mean between the latest available bid and asked prices. As authorized by the Trustees, debt securities (other than short-term obligations) may be valued on the basis of valuations furnished by a pricing service which determines valuations based upon market transactions for normal, institutional-size trading units of securities. Short-term obligations maturing within 60 days are valued at amortized cost which approximates market value. Over-the-counter options are valued at the mean between bid and asked prices provided by dealers. Financial futures contracts listed on commodity exchanges and exchange-traded options are valued at closing settlement prices.  Securities for which there is no such quotation or valuation and all other assets are valued at fair value in good faith by or at the direction of the Trustees. Various factors may be reviewed in order to make a good faith determination of a security’s fair value. These factors may include, but are not limited to, the type and cost of the security; the fundamental analytical data relating to the investment; an evaluation of the forces which influence the market in which the security is sold, including the liquidity and depth of the market; information as to any transactions or offers with respect to the security; price, yield and the extent of public or private trading in similar securities of the issuer or comparable companies. The valuation assigned to fair-valued securities for purposes of calculating the Fund’s NAV may differ from the security’s most recent closing market price and from the prices used by other funds to calculate their NAVs.

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notes to Financial statements

April 30, 2008 (unaudited)

Foreign Securities:  The Fund may invest a portion of its assets in foreign securities. In the event that the Fund executes a foreign security transaction, the Fund will generally enter into a forward foreign currency contract to settle the foreign security transaction. Foreign securities may carry more risk than U.S. securities, such as political, market and currency risks.

The accounting records of the Fund are maintained in U.S. dollars. Prices of securities denominated in foreign currencies are translated into U.S. dollars at the closing rates of exchange at period end. Amounts related to the purchase and sale of foreign securities and investment income are translated at the rates of exchange prevailing on the respective dates of such transactions.

The effect of changes in foreign currency exchange rates on investments is separately identified from the fluctuations arising from changes in market values of securities held and reported with all other foreign currency gains and losses in the Fund’s Statement of Operations.

Options:  In order to hedge against adverse market shifts, the Fund may utilize up to 5% of its total assets to purchase put and call options on securities. When the Fund purchases a call or put option, an amount equal to the premium paid is included in the Fund’s Statement of Assets and Liabilities, as an investment, and is subsequently marked-to-market to reflect the current market value of the option. If an option expires on the stipulated expiration date or if the Fund enters into a closing sale transaction, a gain or loss is realized. If the Fund exercises a call, the cost of the security acquired is increased by the premium paid for the call. If the Fund exercises a put option, a gain or loss is realized from the sale of the underlying security, and the proceeds from such a sale are decreased by the premium originally paid.

In addition, the Fund may seek to increase its income or may hedge a portion of its portfolio investments through writing (i.e., selling) covered put and call options. When the Fund writes a put or call option, an amount equal to the premium received is included in the Statement of Assets and Liabilities, as a liability. The amount of the liability is subsequently marked-to-market to reflect the current market value of the option. If an option expires on its stipulated expiration date or if the Fund enters into a closing purchase transaction, a gain or loss is realized. If a written call option is exercised, a gain or loss is realized for the sale of the underlying security and the proceeds from the sale are increased by the premium originally received. If a written put option is exercised, the cost of the security acquired is decreased by the premium originally received. As the writer of an option, the Fund has no control over whether the underlying securities are subsequently sold (call) or purchased (put) and, as a result, bears the market risk of an unfavorable change in the price of the security underlying the written option. Written and purchased options are non-income producing securities.

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notes to Financial statements

April 30, 2008 (unaudited)

The Fund may utilize up to 5% of its total assets to purchase put and call options on domestic stock indices to hedge against risks of market-wide price movements affecting its assets. In addition, the Fund may write covered put and call options on stock indices. Because no underlying security can be delivered, however, the option represents the holder’s right to obtain from the writer, in cash, a fixed multiple of the amount by which the exercise price exceeds (in the case of a put) or is less than (in the case of a call) the closing value of the underlying index on the exercise date.

Written call option activity as of April 30, 2008 was as follows. There was no written put option activity during the six months ended April 30, 2008.

COVERED CALL OPTIONS WRITTEN

Distributions to Shareholders: The Fund intends to make a level dividend distribution each month to Common Shareholders after payment of interest on any outstanding borrowings or dividends on any outstanding preferred shares. The level dividend rate may be modified by the Board of Trustees from time to time. Any net capital gains earned by the Fund are distributed at least annually to the extent necessary to avoid federal income and excise taxes. Distributions to shareholders are recorded by the Fund on the ex-dividend date. The Fund has applied to the Securities and Exchange Commission for an exemption from Section 19(b) of the Investment Company Act of 1940 and Rule 19b-1 thereunder permitting the Fund to make periodic distributions of long-term capital gains, provided that the distribution policy of the Fund with respect to its Common Shares calls for periodic (e.g., quarterly/monthly) distributions in an amount equal to a fixed percentage of the Fund’s average net asset value over a specified period of time or market price per common share at or about the time of distribution or pay-out of a level dollar amount.

Income Taxes:  The Fund’s policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to its shareholders. Therefore, no federal income tax provision is required.

Effective November 1, 2007, the Fund adopted Financial Accounting Standards Board (“FASB”) Interpretation No. 48 (“FIN 48”) “Accounting for Uncertainty in Income Taxes,” which requires that the financial statement effects of a tax position taken or expected to be

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notes to Financial statements

April 30, 2008 (unaudited)

taken in a tax return be recognized in the financial statements when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. Management has concluded that the Fund has taken no uncertain tax positions that require adjustment to the financial statements to comply with the provisions of FIN 48. The Fund files income tax returns in the U.S. federal jurisdiction and Colorado. The statue of limitations on the Fund’s federal and state tax filings remains open for the fiscal years ended October 31, 2007, October 31, 2006 and October 31, 2005.

Securities Transactions and Investment Income: Investment security transactions are accounted for as of trade date. Dividend income is recorded on the ex-dividend date. Interest income, which includes amortization of premium and accretion of discount, is accrued as earned. Realized gains and losses from securities transactions and unrealized appreciation and depreciation of securities are determined using the First In First Out basis for both financial reporting and income tax purposes.

Use of Estimates:  The Fund’s financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. This requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from these estimates.

Recent Accounting Pronouncements: In September 2006, the FASB issued FASB Statement No. 157, “Fair Valuation Measurement” (“SFAS No. 157”), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Fund is currently evaluating the potential impact the adoption of SFAS No. 157 may have on the Fund’s financial statements.

In February 2007, the FASB issued FASB Statement No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities – Including an Amendment of FASB Statement No. 115” (“SFAS No. 159”), which permits entities to choose to measure many financial instruments and certain other items at fair value. SFAS No. 159 is expected to expand the use of fair value measurement, which is consistent with the FASB’s long-term measurement objectives for accounting for financial instruments. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Fund is currently evaluating the potential impact the adoption of SFAS No. 159 may have on the Fund’s financial statements.

In March 2008, the FASB issued FASB Statement No. 161, “Disclosures about Derivative Instruments and Hedging Activities”  (“SFAS No. 161”), which is intended to improve financial reporting about derivative instruments and hedging activities. It is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The Fund is currently evaluating the potential impact, if any, the adoption of SFAS No. 161 may have on the Fund’s financial statements.

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notes to Financial statements

April 30, 2008 (unaudited)

2. income taxes

Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes. The character of distributions made during the year from net investment income or net realized gains may differ from its ultimate characterization for federal income tax purposes. Also, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or realized gain was recorded by the Fund.

Net unrealized appreciation/depreciation of investments based on federal tax cost were as follows:

The tax basis components of capital differ from the amounts reflected in the Statement of Assets and Liabilities due to temporary book/tax differences primarily arising from wash sales and the tax treatment of certain preferred holdings.

3. capital tRansactions

Common Shares:  There are an unlimited number of no par value common shares of beneficial interest authorized.

Preferred Shares: On April 27, 2004, the Fund’s Board of Trustees authorized the issuance of an unlimited number of no par value preferred shares, in addition to the existing common shares, as part of the Fund’s leverage strategy. Preferred shares issued by the Fund have seniority over the common shares.

The Fund is subject to certain limitations and restrictions while preferred shares are outstanding. Failure to comply with these limitations and restrictions could preclude the Fund from declaring any dividends or distributions to common shareholders or repurchasing common shares and/or could trigger the mandatory redemption of preferred shares at their liquidation value. Specifically, the Fund is required under the Investment Company Act of 1940 to maintain an asset coverage with respect to the outstanding preferred shares of 200% or greater.

The Fund has three series of Auction Market Preferred Shares (“AMPS”): M7, F7 and W28. On June 30, 2004, the Fund issued 3,200 shares of Series M7, 3,200 shares of Series F7, and 3,200 shares of Series W28 each with a net asset and liquidation value of $25,000 per share plus accrued dividends. Dividends on the preferred shares are cumulative and are paid based on an annual rate set through auction procedures. Distributions of net realized capital gains, if any, are paid annually.

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notes to Financial statements

April 30, 2008 (unaudited)

In February 2008, the AMPS market across all closed-end funds became illiquid resulting in failed auctions for the Fund’s AMPS. As such, the Fund continues to pay dividends on the AMPS at the maximum rate (set forth in the Fund’s Statement of Preferences, the governing document for the AMPS), set at LIBOR plus 125 basis points or LIBOR multiplied by 125%, whichever is greater.

As of April 30, 2008, the annualized dividend rates for Series M7, F7 and W28 were 4.01%, 4.04% and 4.05%, respectively.

The dividend rate, as set by the auction process, is generally expected to vary with short-term interest rates. These rates may vary in a manner unrelated to the income received on the Fund’s assets, which could have either a beneficial or detrimental impact on net investment income and gains available to common shareholders.

Preferred shares, which are entitled to one vote per share, generally vote with the common shares but vote separately as a class to elect two Trustees and on any matters affecting the rights of the Preferred Shares.

4. poRtFolio secURities