Microsoft said the sale will allow it to focus on development environments such as the Visual Basic programming system, the Visual C++ development system, and the Visual J++ development tool.
The acquisition further extends Rational's product lines for Windows 95 and Windows NT. The company said the purchase would dilute its earnings for the quarter ended December 31.
"Visual Test is a key element of Rational's strategy," said Rational chief executive Paul Levy.
Added Bob Muglia, vice president of Microsoft: "The combination of Rational and Microsoft tools provides a scalable end-to-end solution for enterprise and Internet application development."