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UNITEDSTATES
SECURITIESANDEXCHANGECOMMISSION
Washington,D.C.20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-21286

Name of Fund: BlackRock Preferred Income Strategies Fund, Inc. (PSY)

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: Anne F. Ackerley, Chief Executive Officer, BlackRock
Preferred Income Strategies Fund, Inc., 40 East 52nd Street, New York, NY 10022.

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

Date of fiscal year end: 10/31/2009

Date of reporting period: 07/31/2009

Item 1 – Schedule of Investments

BlackRock Preferred Income Strategies Fund, Inc.       
Schedule of Investments July 31, 2009 (Unaudited)  (Percentages shown are based on Net Assets) 
  Preferred Securities       
      Par   
Industry  Capital Trusts    (000)         Value 
Building Products - 0.6%  C8 Capital SPV Ltd., 6.64% (a)(b)(c)    $ 3,915  $ 2,206,455 
Capital Markets - 4.4%  Ameriprise Financial, Inc., 7.52%, 6/01/66 (c)  7,600  5,852,000 
  Lehman Brothers Holdings Capital Trust V,       
  3.64% (b)(c)(d)(e)    6,400  640 
  State Street Capital Trust III, 8.25% (b)(c)(f)    2,920  2,730,492 
  State Street Capital Trust IV, 1.63%, 6/01/67 (c)  12,535  7,055,763 
        15,638,895 
Commercial Banks - 12.7%  ABN AMRO North America Holding Preferred Capital Repackaging     
  Trust I, 6.52% (a)(b)(c)    12,035  7,361,665 
  Bank One Capital III, 8.75%, 9/01/30    2,000  1,908,082 
  Bank of Ireland Capital Funding II, LP, 5.57% (a)(b)(c)  1,715  634,550 
  Bank of Ireland Capital Funding III, LP, 6.11% (a)(b)(c)  2,951  1,091,870 
  Barclays Bank Plc, 5.93% (a)(b)(c)    8,500  5,440,000 
  First Empire Capital Trust II, 8.28%, 6/01/27    3,630  2,398,225 
  HSBC America Capital Trust I, 7.81%, 12/15/26 (a)  2,000  1,819,660 
  HSBC Capital Funding LP/Jersey Channel Islands,     
  10.18% (a)(b)(c)(f)    4,835  5,125,100 
  HSBC Finance Capital Trust IX, 5.91%, 11/30/35 (c)  7,300  4,015,000 
  Lloyds Banking Group Plc, 6.66%, 11/21/49 (a)(b)(c)  5,000  2,050,000 
  National City Preferred Capital Trust I, 12.00% (b)(c)  1,100  1,160,720 
  NationsBank Capital Trust III, 1.06%, 1/15/27 (c)  13,470  7,304,970 
  SMFG Preferred Capital USD 3 Ltd., 9.50% (a)(b)(c)  3,550  3,794,808 
  Santander Perpetual SA Unipersonal, 6.67%,       
  10/29/49 (a)(b)(c)    1,125  939,512 
  SunTrust Preferred Capital I, 5.85% (b)(c)    307  178,060 
        45,222,222 
Diversified Financial  AgFirst Farm Credit Bank, 8.39%, 12/15/16 (c)  4,000  2,941,684 
Services - 4.0%  Farm Credit Bank of Texas Series 1, 7.56% (b)(c)  2,500  1,684,425 
  ING Capital Funding Trust III, 8.44% (b)(c)    6,066  4,155,210 
  JPMorgan Chase Capital XXV, 6.80%, 10/01/37  6,150  5,622,029 
        14,403,348 
Electric Utilities - 1.3%  PPL Capital Funding, 6.70%, 3/30/67 (c)    5,925  4,503,000 
Insurance - 50.7%  AON Corp., 8.21%, 1/01/27    10,000  9,400,000 
  AXA SA, 6.38% (a)(b)(c)    13,470  9,429,000 
  Ace Capital Trust II, 9.70%, 4/01/30    11,300  10,806,653 
  The Allstate Corp., 6.50%, 5/15/57 (c)    12,775  10,220,000 
  The Allstate Corp. Series B, 6.13%, 5/15/67 (c)  10,450  8,151,000 
  Chubb Corp., 6.38%, 3/29/67 (c)    17,700  14,337,000 
  Farmers Exchange Capital, 7.05%, 7/15/28 (a)  5,000  3,630,980 
  Financial Security Assurance Holdings Ltd., 6.40% (a)(c)  6,930  2,841,300 
  GE Global Insurance Holding Corp., 7.75%, 6/15/30  10,000  8,448,530 
  Genworth Financial, Inc., 6.15%, 11/15/66 (c)  3,000  1,425,000 
  Great West Life & Annuity Insurance Co., 7.15% (a)(c)  7,500  5,625,000 
  Liberty Mutual Group, Inc., 7.00%, 3/15/37 (a)(c)  10,150  6,553,967 
  Liberty Mutual Group, Inc., 10.75%, 6/15/88 (a)(c)  7,925  6,676,812 
  Lincoln National Corp., 7.00%, 5/17/66 (c)    12,000  7,860,000 
  Lincoln National Corp., 6.05%, 4/20/67 (c)    5,025  3,065,250 
  MetLife, Inc., 6.40%, 12/15/66    16,825  13,207,625 

1

BlackRock Preferred Income Strategies Fund, Inc.       
Schedule of Investments July 31, 2009 (Unaudited)  (Percentages shown are based on Net Assets) 
  Preferred Securities       
           Par   
Industry  Capital Trusts    (000)         Value 
  Nationwide Life Global Funding I, 6.75%, 5/15/67  $ 9,675  $ 6,149,401 
  Oil Casualty Insurance Ltd., 8.00%, 9/15/34 (a)  3,605  2,163,000 
  Principal Life Insurance Co., 8.00%, 3/01/44 (a)  6,325  4,741,568 
  Progressive Corp., 6.70%, 6/15/67 (c)(f)    11,650  8,818,549 
  Reinsurance Group of America, 6.75%, 12/15/65 (c)  3,000  1,934,817 
  Swiss Re Capital I LP, 6.85% (a)(b)(c)    8,875  5,325,000 
  The Travelers Cos., Inc., 6.25%, 3/15/67 (c)    12,850  10,930,544 
  ZFS Finance (USA) Trust IV, 5.88%, 5/09/32 (a)(c)  1,300  1,056,575 
  ZFS Finance (USA) Trust V, 6.50%, 5/09/67 (a)(c)  17,110  14,201,300 
  Zenith National Insurance Capital Trust I, 8.55%, 8/01/28 (a)  3,750  3,506,250 
        180,505,121 
Multi-Utilities - 3.1%  Dominion Resources Capital Trust I, 7.83%, 12/01/27  10,000  9,772,490 
  Puget Sound Energy, Inc. Series A, 6.97%, 6/01/67 (c)  1,825  1,333,929 
        11,106,419 
Oil, Gas & Consumable Fuels -  Enterprise Products Operating LLC, 8.38%, 8/01/66 (c)  4,225  3,675,750 
5.8%  Southern Union Co., 7.20%, 11/01/66 (c)    14,400  10,368,000 
  TransCanada Pipelines Ltd., 6.35%, 5/15/67 (c)  8,300  6,474,000 
        20,517,750 
Road & Rail - 0.8%  BNSF Funding Trust I, 6.61%, 12/15/55 (c)    3,750  3,000,000 
  Total Capital Trusts - 83.4%      297,103,210 
  Preferred Stocks    Shares   
Capital Markets - 0.0%  Deutsche Bank Contingent Capital Trust II, 6.55%  530  10,457 
Commercial Banks - 9.1%  Barclays Bank Plc, 8.13%    225,000  5,152,500 
  First Tennessee Bank NA, 3.90% (a)(c)    4,650  1,862,906 
  HSBC USA, Inc. Series D, 4.50% (c)(g)    131,700  2,502,300 
  HSBC USA, Inc. Series H, 6.50%    120,000  2,678,400 
  Provident Financial Group, Inc., 7.75%    166,800  3,799,921 
  Royal Bank of Scotland Group Plc Series M, 6.40%  15,000  200,100 
  SG Preferred Capital II, 6.30% (c)    23,000  13,800,000 
  Santander Finance Preferred SA Unipersonal, 6.80%  102,200  2,401,700 
        32,397,827 
Diversified Financial Services -  Cobank ACB, 7.00%    152,000  4,775,536 
1.3%         
Electric Utilities - 3.3%  Alabama Power Co., 5.83%    14,000  338,800 
  Alabama Power Co., 6.50%    145,000  3,277,000 
  Entergy Arkansas, Inc., 6.45%    114,400  2,320,181 
  Entergy Louisiana LLC, 6.95%    49,850  3,489,500 
  Interstate Power & Light Co. Series B, 8.38%    80,000  2,160,800 
        11,586,281 
Insurance - 14.3%  Aspen Insurance Holdings Ltd., 7.40% (c)    194,000  3,530,800 
  Axis Capital Holdings Ltd. Series A, 7.25%    129,300  2,783,829 
  Axis Capital Holdings Ltd. Series B, 7.50% (c)    36,000  2,904,750 
  Endurance Specialty Holdings Ltd. Series A, 7.75%  139,200  2,846,640 
  MetLife, Inc. Series B, 6.50%    904,400  20,710,760 

2

BlackRock Preferred Income Strategies Fund, Inc.       
Schedule of Investments July 31, 2009 (Unaudited)  (Percentages shown are based on Net Assets) 
  Preferred Securities       
Industry  Preferred Stocks    Shares         Value 
  Prudential Plc, 6.50%    92,400  $ 1,963,500 
  RenaissanceRe Holding Ltd. Series D, 6.60%    435,000  9,143,700 
  Zurich RegCaPS Funding Trust, 6.58% (a)(c)    9,800  7,144,813 
        51,028,792 
Multi-Utilities - 2.9%  Pacific Gas & Electric Co. Series A, 6.00%    140,000  3,592,400 
  Dominion Resources, Inc., 7.50% (c)    8,400,000  6,636,000 
        10,228,400 
Real Estate Investment Trusts  BRE Properties, Inc. Series D, 6.75%    35,000  652,050 
(REITs) - 5.8%  Developers Diversified Realty Corp., 8.00%    400,000  5,872,000 
  First Industrial Realty Trust, Inc., 6.24% (c)    2,390  924,631 
  Firstar Realty LLC, 8.88% (a)    4,000  3,818,750 
  Kimco Realty Corp. Series F, 6.65%    50,000  960,500 
  Public Storage, Inc. Series I, 7.25%    160,000  3,880,000 
  Public Storage Series F, 6.45%    40,000  824,000 
  Public Storage Series M, 6.63%    71,900  1,547,288 
  Regency Centers Corp. Series D, 7.25%    100,000  2,080,000 
        20,559,219 
Thrifts & Mortgage Finance -  Sovereign Bancorp, Inc. Series C, 7.30% (h)    48,000  1,099,680 
0.3%         
Wireless Telecommunication  Centaur Funding Corp., 9.08%    2,423  2,036,077 
Services - 0.6%         
  Total Preferred Stocks - 37.6%      133,722,269 
           Par   
  Trust Preferreds    (000)   
Communications Equipment -  Corporate-Backed Trust Certificates, Motorola Debenture Backed     
0.4%  Series 2002-14, 8.38%, 11/15/28    $ 2,000  1,545,987 
Consumer Finance - 4.0%  Capital One Capital II, 7.50%, 6/15/66    16,702  14,190,246 
Diversified Financial Services -  ING Groep NV, 7.20% (b)    3,500  2,776,246 
0.8%         
Electric Utilities - 2.7%  Georgia Power Co. Series O, 1.48%, 4/15/33    1,250  1,240,192 
  HECO Capital Trust III, 6.50%, 3/18/34    1,250  1,142,993 
National Rural Utilities Cooperative Finance Corp., 6.75%,
  2/15/43    1,250  1,176,158 
  PPL Energy Supply LLC, 7.00%, 7/15/46    5,835  5,971,399 
        9,530,742 
Gas Utilities - 4.2%  Southwest Gas Capital II, 7.70%, 9/15/43    15,125  14,854,049 
Insurance - 3.2%  ABN AMRO North America Capital Funding Trust II,     
  2.87% (a)(b)(c)    11,000  646,316 
  Lincoln National Capital VI Series F, 6.75%, 9/11/52  5,000  3,930,818 
  W.R. Berkley Capital Trust II, 6.75%, 7/26/45  7,375  6,884,192 
        11,461,326 
  Total Trust Preferreds - 15.3%      54,358,596 
  Total Preferred Securities - 136.3%      485,184,075 

3

BlackRock Preferred Income Strategies Fund, Inc.         
Schedule of Investments July 31, 2009 (Unaudited)      (Percentages shown are based on Net Assets) 
              Par   
Industry  Corporate Bonds          (000)  Value 
Insurance - 2.5%  Oil Insurance Ltd., 7.56% (a)(b)(c)                     $ 5,000 $  2,235,350 
  QBE Insurance Group Ltd., 9.75%, 3/14/14 (a)    5,967  6,478,986 
  Structured Asset Repackaged Trust Series 2004-1, 1.63%,       
  4/21/11 (a)(b)(c)          341  299,986 
  Total Corporate Bonds - 2.5%        9,014,322 
  Total Long-Term Investments         
  (Cost - $654,954,349) - 138.8%        494,198,397 
  Short-Term Securities        Shares   
  BlackRock Liquidity Funds, TempFund, 0.29% (i)(j)                   35,181,340  35,181,340 
  Total Short-Term Securities         
  (Cost - $35,181,340) - 9.9%        35,181,340 
  Total Investments             
  (Cost - $690,135,689*) - 148.7%        529,379,737 
  Liabilities in Excess of Other Assets - (1.2)%      (4,236,551) 
  Preferred Shares, at Redemption Value - (47.5)%    (169,080,511) 
  Net Assets Applicable to Common Shares - 100.0%    $ 356,062,675 
* The cost and unrealized appreciation (depreciation) of investments as of July 31, 2009, as computed for federal income 
                   tax purposes, were as follows:               
                   Aggregate cost    $ 691,191,965         
                   Gross unrealized appreciation  $ 8,893,126         
                   Gross unrealized depreciation    (170,705,354)         
                   Net unrealized depreciation  $ (161,812,228)         
           (a) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in 
                   transactions exempt from registration to qualified institutional investors.       
         (b) Security is perpetual in nature and has no stated maturity date. In certain instances, a final maturity date may be 
                   extended and/or the final payment may be deferred at the issuer's option for a specified time without default. 
           (c) Variable rate security. Rate shown is as of report date.         
         (d) Non-income producing security.               
         (e) Issuer filed for bankruptcy and/or is in default of interest payments.         
           (f) All or a portion of security held as collateral in connection with open reverse repurchase agreements.   
           (g) All or a portion of security has been pledged as collateral in connection with open financial futures contracts.   
         (h) Depositary receipts.                 
           (i) Investments in companies considered to be an affiliate of the Fund, for purposes of Section 2(a)(3) of the Investment 
                   Company Act of 1940, were as follows:               
                   Affiliate        Net Activity    Income     
                   BlackRock Liquidity Funds, TempFund      35,181,340  $ 48,871   
                   BlackRock Liquidity Series, LLC               
                       Cash Sweep Series      $ (28,803,004)  $ 108,244   
           (j) Represents the current yield as of report date.             
             • For Fund compliance purposes, the Fund's industry classifications refer to any one or more of the industry sub-   
                   classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund 
                   management. This definition may not apply for purposes of this report, which may combine industry sub-classifications 
                   for reporting ease.                 
        4         

BlackRock Preferred Income Strategies Fund, Inc.         
Schedule of Investments July 31, 2009 (Unaudited)             
             • Financial futures contracts purchased as of July 31, 2009 were as follows:     
                  Unrealized 
                   Contracts         Issue    Expiration Date      Face Amount  Appreciation 
26  30-Year U.S. Treasury Notes  September 2009    $ 3,036,167  $ 57,833 
             • Reverse repurchase agreements outstanding as of July 31, 2009 were as follows:     
  Interest            Net Closing   
                   Counterparty    Rate  Trade Date  Maturity Date  Amount  Face Amount 
                   Barclays Bank Plc  1.29%  7/14/09    8/17/09  $ 7,579,772  $ 7,570,819 
             • Credit default swaps on single-name issue - buy protection outstanding as of July 31, 2009 were as follows:   
    Pay               
    Fixed              Unrealized 
                   Issuer    Rate  Counterparty      Expiration  Notional Amount (000)  Depreciation 
                   Altria Group, Inc.  1.03%  Deutsche Bank AG  December 2013  $8,000  $ (134,310) 
                   Nordstrom Inc.    5.20%  Deutsche Bank AG    June 2014  $2,000  (315,393) 
                   Total                  $ (449,703) 
             • Credit default swaps on single-name issue - sold protection outstanding as of July 31, 2009 were as follows:   
  Receive               
  Fixed            Credit  Notional Amount  Unrealized 
                   Issuer  Rate  Counterparty    Expiration    Rating1  (000)2  Appreciation 
                   Philip Morris                   
                   International,                   
                   Inc.  1.73%  Deutsche Bank AG  December 2013    A  $8,000  $ 233,810 
                                     1 Using the Standard and Poor's ratings of the issuer.         
                                     2 The maximum potential amount the Fund may pay should a negative credit event take place as defined under 
                                         the terms of the agreement.             
          5         

BlackRock Preferred Income Strategies Fund, Inc.   
Schedule of Investments as of July 31, 2009 (Unaudited)     
Ÿ  Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, "Fair Value 
  Measurements" clarifies the definition of fair value, establishes a framework for measuring fair values and 
  requires additional disclosures about the use of fair value measurements. Various inputs are used in 
  determining the fair value of investments, which are as follows: 
                       Ÿ Level 1 - price quotations in active markets/exchanges for identical securities 
  Ÿ Level 2 - other observable inputs (including, but not limited to: quoted prices for similar assets or 
                             liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in 
                             markets that are not active, inputs other than quoted prices that are observable for the assets or 
                             liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, 
                             credit risks and default rates) or other market-corroborated inputs) 
                       Ÿ Level 3 - unobservable inputs based on the best information available in the circumstances, to the 
                             extent observable inputs are not available (including the Fund's own assumptions used in 
                             determining the fair value of investments)     
  The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated 
  with investing in those securities. For information about the Fund's policy regarding valuation of investments 
  and other significant accounting policies, please refer to the Fund's most recent financial statements as 
  contained in its semi-annual report.     
  The following table summarizes the inputs used as of July 31, 2009 in determining the fair valuation of the 
  Fund's investments:     
                             Valuation    Investments in 
                                   Inputs    Securities 
      Assets 
                             Level 1     
                                   Long-Term Investments     
                                       Preferred Stocks  $ 80,209,204 
                                       Trust Preferreds    53,712,280 
                                   Short-Term Securities    35,181,340 
                             Total Level 1    169,102,824 
                             Level 2     
                                   Long-Term Investments     
                                       Capital Trusts    294,940,210 
                                       Preferred Stocks    36,223,565 
                                       Trust Preferreds    646,316 
                                       Corporate Bonds    8,714,336 
                             Total Level 2    340,524,427 
                             Level 3     
                                   Long-Term Investments     
                                       Capital Trusts    2,163,000 
                                       Preferred Stocks    17,289,500 
                                       Corporate Bonds    299,986 
                             Total Level 3    19,752,486 
                             Total  $ 529,379,737 
      6 

BlackRock Preferred Income Strategies Fund, Inc.         
Schedule of Investments as of July 31, 2009 (Unaudited)           
                                       Valuation      Other Financial         
Inputs      Instruments1         
    Assets  Liabilities       
                                     Level 1    $ 57,833    -       
                                     Level 2      -  $ (8,020,522)       
                                     Level 3      233,810    -       
                                     Total    $ 291,643  $ (8,020,522)       
                                     1 Other financial instruments are swaps, financial futures contracts and reverse     
                                     repurchase agreements. Swaps and financial futures contracts are shown at the   
                                     unrealized appreciation/depreciation on the instrument. Reverse repurchase     
                                     agreements are shown at market value.           
         The following is a reconciliation of investments for unobservable inputs (Level 3) used in determining fair 
         value:                 
      Investments in         
      Securities         
    Captital  Preferred  Corporate     
    Trusts  Stocks  Bonds    Total 
         Balance, as of        -    -    - 
         October 31, 2008                 
         Realized gain (loss)        -    -    - 
         Change in unrealized        -    -    - 
         appreciation/                 
         depreciation                 
         Net sales        -    -    - 
         Net transfers in  $ 2,163,000  $ 17,289,500  $ 299,986  $ 19,752,486 
         Balance, as of                 
         July 31, 2009  $ 2,163,000  $ 17,289,500  $ 299,986  $ 19,752,486 
    Other Financial           
    Instruments2           
    Assets           
         Balance, as of October 31, 2008  -           
         Accrued discounts/premiums    -           
         Realized gain (loss)      -           
         Change in unrealized                 
         appreciation/depreciation    -           
         Net purchases (sales)      -           
         Net transfers in    $ 233,810           
         Balance, as of July 31, 2009  $ 233,810           
         2 Other financial instruments are swaps which are shown at the unrealized       
         appreciation/depreciation on the instrument.             
        7         

Item 2 – Controls and Procedures

2(a) – The registrant's principal executive and principal financial officers or persons performing
similar functions have concluded that the registrant's disclosure controls and procedures (as
defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the
“1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the
evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act
and Rule 13(a)-15(b) under the Securities Exchange Act of 1934, as amended.

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

Item 3 – Exhibits

Certifications – Attached hereto

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment
Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

BlackRock Preferred Income Strategies Fund, Inc.

By: /s/ Anne F. Ackerley
Anne F. Ackerley
Chief Executive Officer of
BlackRock Preferred Income Strategies Fund, Inc.

Date: September 22, 2009

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

By: /s/ Anne F. Ackerley
Anne F. Ackerley
Chief Executive Officer (principal executive officer) of
BlackRock Preferred Income Strategies Fund, Inc.

Date: September 22, 2009

By: /s/ Neal J. Andrews
Neal J. Andrews
Chief Financial Officer (principal financial officer) of
BlackRock Preferred Income Strategies Fund, Inc.

Date: September 22, 2009