FORM 5
Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
Form 3 Holdings Reported
Form 4 Transactions Reported
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

ANNUAL STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934 or Section 30(h) of the Investment Company Act of 1940
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1. Name and Address of Reporting Person *
WALLACE RICHARD P
 2. Issuer Name and Ticker or Trading Symbol
KLA TENCOR CORP [klac] 		5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
_____ Director _____ 10% Owner
__X__ Officer (give title below) _____ Other (specify below)
CEO
(Last)
(First)
(Middle)

KLA TENCOR, 160 RIO ROBLES		 3. Statement for Issuer's Fiscal Year Ended (Month/Day/Year)
06/30/2006
(Street)


SAN JOSE, CA 95134		 4. If Amendment, Date Original Filed(Month/Day/Year)
 6. Individual or Joint/Group Reporting
(check applicable line)

_X_ Form Filed by One Reporting Person
___ Form Filed by More than One Reporting Person
(City)
(State)
(Zip)
Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1.Title of Security
(Instr. 3)		 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code
(Instr. 8)		 4. Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4 and 5)		 5. Amount of Securities Beneficially Owned at end of Issuer's Fiscal Year
(Instr. 3 and 4)		 6. Ownership Form: Direct (D) or Indirect (I)
(Instr. 4)		 7. Nature of Indirect Beneficial Ownership
(Instr. 4)
Amount (A) or (D) Price
Common Stock             4,125 (1) D  
Common Stock - Restricted Stock Units             141,111 D  

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly. Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. SEC 2270 (9-02)

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security
(Instr. 3)		 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (Month/Day/Year) 3A. Deemed Execution Date, if any (Month/Day/Year) 4. Transaction Code
(Instr. 8)		 5. Number of Derivative Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4, and 5)		 6. Date Exercisable and Expiration Date
(Month/Day/Year)		 7. Title and Amount of Underlying Securities
(Instr. 3 and 4)		 8. Price of Derivative Security
(Instr. 5)		 9. Number of Derivative Securities Beneficially Owned at End of Issuer's Fiscal Year
(Instr. 4)		 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I)
(Instr. 4)		 11. Nature of Indirect Beneficial Ownership
(Instr. 4)
(A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
Non-Qualified Stock Option $ 26.25           11/10/2001 11/10/2010 Common Stock
7,000
  7,000
D
 
Non-Qualified Stock Option $ 29.31           10/02/2002 10/02/2011 Common Stock
25,500
  25,500
D
 
Non-Qualified Stock Option $ 32.75           04/04/2002 04/04/2011 Common Stock
8,459
  8,459
D
 
Non-Qualified Stock Option $ 34.67           11/08/2003 01/28/2013 Common Stock
20,000
  20,000
D
 
Non-Qualified Stock Option $ 37.05           11/08/2003 11/08/2012 Common Stock
10,000
  10,000
D
 
Non-Qualified Stock Option $ 40.14           05/22/2004 05/22/2013 Common Stock
1,000
  1,000
D
 
Non-Qualified Stock Option $ 40.66           10/27/2004 08/02/2014 Common Stock
11,250
  11,250
D
 
Non-Qualified Stock Option $ 41.79           09/21/2005 09/21/2014 Common Stock
75,000
  75,000
D
 
Non-Qualified Stock Option $ 44.6875           08/13/2000 08/13/2010 Common Stock
19,169
  19,169
D
 
Non-Qualified Stock Option $ 45.16           10/27/2004 04/26/2014 Common Stock
18,750
  18,750
D
 
Non-Qualified Stock Option $ 47.95           09/26/2006 09/26/2012 Common Stock
125,000
  125,000
D
 
Non-Qualified Stock Option $ 51.229           11/08/2003 07/30/2013 Common Stock
12,500
  12,500
D
 
Non-Qualified Stock Option $ 52.53           02/17/2007 02/17/2013 Common Stock
50,000
  50,000
D
 
Non-Qualified Stock Option $ 53.86           10/27/2004 10/27/2013 Common Stock
30,000
  30,000
D
 
Non-Qualified Stock Option $ 58.10           10/27/2004 01/27/2014 Common Stock
15,000
  15,000
D
 

Reporting Owners

Reporting Owner Name / Address Relationships
Director 10% Owner Officer Other
WALLACE RICHARD P
KLA TENCOR
160 RIO ROBLES
SAN JOSE, CA 95134		       CEO  

Signatures

Richard Wallace 08/11/2006
**Signature of Reporting Person Date

Explanation of Responses:

* If the form is filed by more than one reporting person, see Instruction 4(b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1) Includes 574 shares purchased through the Employee Stock Purchase Plan during the fiscal year.
 
Remarks:
Voluntary filing to show all holdings as of 6/30/2006

Note: File three copies of this Form, one of which must be manually signed. If space provided is insufficient, see Instruction 6 for procedure.

Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB number.