Prospectus Supplement to Prospectus dated November 20, 2000


$300,000,000                                                     [NISOURCE LOGO]
5 3/4% NOTES DUE 2003



                                   PRICE TO                  DISCOUNTS &               PROCEEDS TO
                                   PUBLIC(1)                 COMMISSIONS               COMPANY(2)
                                   ------------              ------------              ------------
Per Note                             99.917%                   0.25%                     99.667%
Total                              $299,751,000               $750,000                 $299,001,000


(1) Plus accrued interest, if any, from April 6.
(2) Before deducting expenses.

The underwriters are offering the Notes subject to various conditions. The
underwriters expect to deliver the Notes to purchasers on or about April 6,

This prospectus supplement may be used to offer and sell the offered Notes only
if accompanied by the prospectus.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if the
prospectus supplement or the prospectus to which it relates is truthful or
complete. Any representation to the contrary is a criminal offense.

                                BARCLAYS CAPITAL

April 3, 2001

                               TABLE OF CONTENTS

                             PROSPECTUS SUPPLEMENT

Incorporation by Reference.......     S-2
NiSource Inc. ...................     S-3
NiSource Finance Corp. ..........     S-5
Use of Proceeds..................     S-5
Ratio of Earnings to Fixed
  Charges........................     S-6

Supplemental Description of the
  Notes..........................     S-7
Underwriting.....................     S-8
Legal Matters....................     S-9
Experts..........................     S-9


About this Prospectus............       1
Where You Can Find More
  Information....................       1
Forward-Looking Statements.......       3
NiSource Inc. ...................       4
NiSource Finance Corp. ..........       6
Use of Proceeds..................       6
Ratios of Earnings to Fixed
  Charges........................       7
Description of Capital Stock.....       8
Description of the Debt
  Securities.....................      11
Plan of Distribution.............      21
Legal Opinions...................      22
Experts..........................      22



     We provide information to you about the Notes in two separate documents:
(a) the accompanying prospectus, which provides general information, some of
which may not apply to the Notes, and (b) this prospectus supplement, which
describes the specific terms of the Notes.

     Whenever the information in this prospectus supplement is more specific
than the information in the accompanying prospectus, you should rely on the
information in this prospectus supplement.

     You should rely only on the information provided in this prospectus
supplement and the accompanying prospectus, including the information
incorporated by reference. We have not authorized anyone to provide you with
different information. We are not offering the Notes in any state where the
offer is not permitted. The information in this document may only be accurate on
the date of this document.


                           INCORPORATION BY REFERENCE

     The SEC allows us to "incorporate by reference" information into this
prospectus and prospectus supplement. This means that we can disclose important
information to you by referring you to another document that NiSource or its
corporate predecessors, including Columbia Energy Group (SEC File No. 1-1098),
have filed separately with the SEC. The information incorporated by reference is
considered to be part of this prospectus and prospectus supplement. Information
that NiSource files with the SEC after the date of this prospectus supplement
will automatically modify and supersede the information included or incorporated
by reference in this prospectus and prospectus supplement to the extent that the
subsequently filed information modifies or supersedes the existing information.
In addition to the items we have incorporated by reference in the attached
prospectus, which include NiSource's Annual Report on Form 10-K for the fiscal
year ended December 31, 2000 filed March 30, 2001 and NiSource's Current Report
on Form 8-K filed April 2, 2001, we also incorporate by reference the
Consolidated Financial Statements and Schedules of Columbia included in its
Annual Report on Form 10-K for the fiscal year ended December 31, 2000 filed
March 29, 2001.

     You may request a copy of any of these filings at no cost by writing to or
telephoning us at the following address and telephone number: Gary W. Pottorff,
NiSource Inc., 801 East 86th Avenue, Merrillville, Indiana 46410, telephone:
(877) 647-5990.


                                 NISOURCE INC.

     Overview. NiSource is a super-regional energy holding company that provides
natural gas, electricity and other products and services to 3.6 million
customers located within the energy corridor that runs from the Gulf Coast
through the Midwest to New England. On November 1, 2000, NiSource completed its
acquisition of Columbia Energy Group for an aggregate consideration of
approximately $6 billion, with 30% of the consideration paid in common stock and
70% of the consideration paid in cash and SAILS (units each consisting of a zero
coupon debt security coupled with a forward equity contract). NiSource also
assumed approximately $2 billion in Columbia debt.

     As a result of the acquisition, NiSource is the largest natural gas
distribution company, as measured by number of customers, operating east of the
Rockies. NiSource's principal subsidiaries include Columbia Energy Group, a
vertically-integrated natural gas distribution, transmission, storage and
exploration and production holding company whose subsidiaries provide service to
customers in the Midwest, the Mid-Atlantic and the Northeast; Northern Indiana
Public Service Company, a vertically-integrated gas and electric company
providing service to customers in northern Indiana; and Bay State Gas Company, a
natural gas distribution company serving customers in New England. NiSource's
business lines include:

     - gas distribution;

     - gas transmission and storage;

     - electric operations;

     - exploration and production; and

     - other products and services.

                                [NISOURCE CHART]


     Strategy. NiSource is focused on becoming the premier energy company
serving customers throughout the energy-intensive corridor that extends from the
supply areas in the Gulf Coast through the consumption centers in the Midwest,
Mid-Atlantic and Northeast. This corridor is home to 30% of the nation's
population and 40% of its energy consumption. NiSource believes natural gas will
be the fuel of choice to meet the corridor's growing energy needs. The
acquisition of Columbia furthers this strategy by combining NiSource's natural
gas distribution assets in Indiana and New England with Columbia's natural gas
distribution, storage and exploration and production assets in Ohio, the
Mid-Atlantic and Appalachia and Columbia's interstate transmission assets.

     Gas Distribution. NiSource has the nation's second largest volume of gas
sales, on average over 2.6 billion cubic feet per day. Through its wholly-owned
subsidiary, Columbia Energy Group, NiSource owns five distribution subsidiaries
that provide natural gas under the Columbia Gas name to nearly 2.1 million
residential, commercial and industrial customers in Ohio, Pennsylvania,
Virginia, Kentucky and Maryland. NiSource also distributes natural gas to
approximately 751,000 customers in northern Indiana through three subsidiaries:
Northern Indiana Public Service Company, Kokomo Gas and Fuel Company and
Northern Indiana Fuel and Light Company, Inc. Additionally, NiSource's
subsidiaries, Bay State Gas Company and Northern Utilities, Inc., distribute
natural gas to more than 320,000 customers in the areas of Brockton, Lawrence
and Springfield, Massachusetts, Lewiston and Portland, Maine, and Portsmouth,
New Hampshire.

     Gas Transmission and Storage. NiSource's subsidiaries, Columbia Gas
Transmission Corporation and Columbia Gulf Transmission Company, own and operate
an interstate pipeline network of approximately 15,880 miles extending from
offshore in the Gulf of Mexico to Lake Erie, New York and the eastern seaboard.
Together, Columbia Gas Transmission and Columbia Gulf serve customers in 15
northeastern, mid-Atlantic, midwestern and southern states and the District of
Columbia. In addition, Columbia Gas Transmission operates one of the nation's
largest underground natural gas storage systems capable of storing approximately
670 billion cubic feet of natural gas.

     Columbia Gas Transmission is also participating in the proposed 442-mile
Millennium Pipeline Project that has been submitted to the Federal Energy
Regulatory Commission for approval. As proposed, the project will transport
approximately 700 billion cubic feet of natural gas per day from the Lake Erie
region to eastern markets.

     Electric Operations. NiSource generates and distributes electricity to the
public through its subsidiary Northern Indiana Public Service Company. Northern
Indiana provides electric service to approximately 430,000 customers in 21
counties in the northern part of Indiana. Northern Indiana owns and operates
four coal-fired electric generating stations with a net capacity of 3,179
megawatts, four gas fired combustion turbine generating units with a net
capacity of 203 megawatts and two hydroelectric generating plants with a net
capacity of 10 megawatts, for a total system net capacity of 3,392 megawatts.
Northern Indiana is interconnected with five neighboring electric utilities.
During the year ended December 31, 2000, Northern Indiana generated 94.8% and
purchased 5.2% of its electric requirements.

     Exploration and Production. NiSource also owns Columbia Energy Resources,
Inc., an exploration and production subsidiary that explores for, develops,
gathers and produces natural gas and oil in Appalachia and Canada. As of
December 31, 2000, Columbia Energy Resources held interests in approximately 3.9
million net acres of gas and oil leases and had proved gas reserves of nearly
1.1 trillion cubic feet of natural gas equivalent. Columbia Energy Resources has
a financial interest in approximately 8,000 wells as well as 6,200 miles of
gathering facilities.

     Other Products and Services. NiSource develops unregulated power projects
through its subsidiary, Primary Energy, Inc. Primary Energy works with
industrial customers in managing the engineering, construction, operation and
maintenance of "inside the fence" cogeneration plants that provide
cost-effective, long-term sources of energy for energy-intensive facilities.

     NiSource provides non-regulated energy services through its wholly-owned
subsidiary Energy USA, Inc. Energy USA and its subsidiaries provide to customers
in 22 states a variety of energy-related services, including gas marketing and
asset management services and underground utility locating and marking services.
NiSource expanded its gas marketing and trading operations with the April 1999
acquisition of TPC Corporation, now renamed Energy USA-TPC Corp., a natural gas
asset management company. In addition, NiSource has invested in a number of
distributed generation technologies including fuel cells and microturbine

     NiSource is completing a fiber optics network for voice and data
communication along its pipeline rights-of-way between New York and Washington

     Non-Core Divestitures. In connection with the Columbia acquisition,
NiSource has sold or is divesting certain businesses judged to be non-core to
NiSource's energy strategy. Subsequent to the announcement of the Columbia
acquisition, NiSource sold Market Hub Partners, L.P., which owns and operates
salt cavern gas storage facilities in Texas and Louisiana, and Columbia
completed the divestiture of its interest in the Cove Point LNG facilities, its
retail marketing business and four qualifying facility power plants. NiSource
recently completed the sale of its Miller Pipeline subsidiary and Columbia's
electric generation business. NiSource also recently sold substantially all the
assets of Columbia's petroleum businesses. After-tax proceeds from these asset
sales totaled approximately $725 million. On January 31, 2001, NiSource
announced a definitive agreement to sell the stock and assets of Columbia
Propane Corporation to AmeriGas Partners, L.P. for approximately $208 million,
including $53 million of AmeriGas partnership common units. NiSource is pursuing
the sale of other smaller non-core businesses. Through its wholly-owned
subsidiary, IWC Resources Corporation and its subsidiaries, NiSource supplies
water to residential, commercial and industrial customers and for fire
protection service in Indianapolis, Indiana and surrounding areas. As part of
the SEC order approving the Columbia acquisition, NiSource has been ordered to
divest its water utility business by November 2003. NiSource is reporting the
results of its water utility business as discontinued operations.

                             NISOURCE FINANCE CORP.

     NiSource Finance is a wholly-owned special purpose finance subsidiary of
NiSource that engages in financing activities to raise funds for the business
operations of NiSource and its subsidiaries. NiSource Finance's obligations
under the Notes will be fully and unconditionally guaranteed by NiSource.

     NiSource Finance was incorporated in February 2000 under the laws of the
State of Indiana. Before the acquisition of Columbia Energy Group, NiSource
conducted its financing activities through NiSource Capital Markets, Inc., a
first-tier subsidiary of NiSource. We expect NiSource to conduct all future
financing through NiSource Finance.

                                USE OF PROCEEDS

     We will use the net proceeds from the sale of the Notes offered by this
prospectus and prospectus supplement to repay commercial paper at rates of
interest ranging from 5.95% to 6.00% issued by NiSource Finance in connection
with the November 2000 acquisition of Columbia Energy Group and for general
corporate purposes.



     The following are ratios of earnings to fixed charges for each of the
periods indicated for NiSource Inc. (incorporated in Indiana and a corporate
predecessor to NiSource) for the years 1996, 1997, 1998 and 1999, for NiSource
for the year 2000 and for NiSource on a pro forma basis for the twelve months
ended December 31, 2000, accounting for the acquisition of Columbia Energy Group
as a purchase business combination and giving effect to the acquisition as if it
had occurred on January 1, 2000:

      PRO FORMA                         ACTUAL
---------------------    ------------------------------------
        ENDED               FISCAL YEAR ENDED DECEMBER 31
    DECEMBER 31,         ------------------------------------
        2000             2000    1999    1998    1997    1996
    -------------        ----    ----    ----    ----    ----
        1.70             1.79    2.15    3.05    3.19    3.21

     For purposes of calculating the ratio of earnings to fixed charges,
"earnings" consist of income from continuing operations before income taxes plus
fixed charges. "Fixed charges" consist of interest on all indebtedness,
amortization of debt expense, the portion of rental expenses on operating leases
deemed to be representative of the interest factor and preferred stock dividend
requirements of consolidated subsidiaries.



     Please read the following information concerning the Notes in conjunction
with the statements under "Description of the Debt Securities" in the
accompanying prospectus, which the following information supplements and, if
there are any inconsistencies, supersedes. The following description is not
complete. The Notes will be issued under the Indenture, dated November 14, 2000,
that we have entered into with The Chase Manhattan Bank, as trustee. The
Indenture is described in the accompanying prospectus and is filed as an exhibit
to the registration statement under which the Notes are being offered and sold.


     We will offer $300 million of 5 3/4% Notes due 2003 as a series of notes
under the Indenture. The Notes will be fully and unconditionally guaranteed by
NiSource. See "Guarantee of NiSource" in the accompanying prospectus.

     The Notes will constitute part of the senior debt of the NiSource Finance,
and are equal in right of payment to any other senior unsecured obligations of
NiSource Finance. The Notes will not be redeemable by us until maturity. The
Notes will not be subject to any mandatory redemption or sinking fund payments.
NiSource Finance will pay principal and interest at the corporate trust offices
of the Trustee.

Interest Payments

     The entire principal amount of the Notes will mature and become due and
payable, together with any accrued and unpaid interest, on April 15, 2003. Each
Note will bear interest at the annual rate set forth on the cover page of this
prospectus supplement beginning April 6, 2001. The interest will be paid
semi-annually on April 15 and October 15, commencing October 15, 2001. Interest
will be paid to the person in whose name the Note is registered at the close of
business on the April 1 and October 1 immediately preceding April 15 and October
15. We will compute the amount of interest payable on the basis of a 360-day
year of twelve 30 day months.

Forms and Denominations

     The Notes will be issued as one or more global securities in the name of a
nominee of the Depository Trust Company and will be available only in book-entry
form. See "Book-Entry Issuance" in the accompanying prospectus. The Notes are
available for purchase in multiples of $1,000.



     We have agreed to sell and Barclays Capital Inc. and the other underwriters
listed below have severally agreed to purchase the principal amount of Notes
listed in the table below. The terms of these purchases are governed by our
underwriting agreement with Barclays Capital Inc. for itself and as
representative for all of the underwriters.

                        UNDERWRITERS                            PRINCIPAL AMOUNT
                        ------------                            ----------------
Barclays Capital Inc. ......................................      $210,000,000
Banc of America Securities LLC..............................      $ 45,000,000
Salomon Smith Barney Inc. ..................................      $ 45,000,000
Total.......................................................      $300,000,000

     Barclays Capital Inc. has advised us that the Notes will initially be
offered at the public offering price set forth on the cover of this prospectus
supplement. Any Notes sold by the underwriters to securities dealers may be sold
at a discount from the public offering price of up to 1.0% of the principal
amount of the Notes. If all the Notes are not sold at the initial offering
price, the underwriters may change the offering price and the other selling

     The Notes are a new issue of securities with no established trading market.
We have been advised by the underwriters that the underwriters intend to make a
market in the Notes but are not obligated to do so and may discontinue market
making at any time without notice. No assurance can be given as to the liquidity
of the trading market for the Notes.

     In connection with the offering, the underwriters may purchase and sell
Notes in the open market. These transactions may include short sales,
stabilizing transactions and purchases to cover positions created by short
sales. Short sales involve the sale by the underwriters of a greater number of
Notes than they are required to purchase in the offering. Stabilizing
transactions consist of certain bids or purchases made for the purpose of
preventing or retarding a decline in the market price of the Notes while the
offering is in progress.

     The underwriters also may impose a penalty bid. This occurs when a
particular underwriter repays to the underwriters a portion of the underwriting
discount received by it because the representatives have repurchased Notes sold
by or for the account of such underwriter in stabilizing or short covering

     These activities by the underwriters may stabilize, maintain or otherwise
affect the market price of the Notes. As a result, the price of the Notes may be
higher than the price that otherwise might exist in the open market. If these
activities are commenced, they may be discontinued by the underwriters at any
time. These transactions may be effected in the over-the-counter market or

     We estimate that our share of the total expenses of the offering, excluding
underwriting discounts and commissions, will be approximately $75,000.

     The underwriters and certain of their affiliates have provided and may in
the future provide investment banking and other financial services to us and
certain of our affiliates for which they receive customary fees. In addition,
certain of the underwriters (or affiliates thereof) acted as lenders under our
existing credit facilities.

     We have agreed to indemnify the underwriters against liabilities under the
Securities Act of 1933, or contribute to payments that the underwriters may be
required to make in respect thereof.


                                 LEGAL MATTERS

     The validity of the Notes will be passed upon for us by Schiff Hardin &
Waite, Chicago, Illinois. Peter V. Fazio, Jr., a partner of the firm who also
serves as executive vice president and general counsel of NiSource, holds
approximately 11,400 shares of NiSource's common stock.


     The consolidated financial statements and schedules of NiSource and the
consolidated financial statements and schedules of Columbia Energy Group
incorporated by reference herein have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are incorporated by reference herein in reliance upon the authority
of said firm as experts in giving said reports.



          Prospectus Supplement to Prospectus dated November 20, 2000

                                [NISOURCE LOGO]
                             NISOURCE FINANCE CORP.
                           UNCONDITIONALLY GUARANTEED
                                BY NISOURCE INC.
                             5 3/4% NOTES DUE 2003

                                BARCLAYS CAPITAL
                         BANC OF AMERICA SECURITIES LLC
                              SALOMON SMITH BARNEY

                                 APRIL 3, 2001