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 *
LEVY KENNETH
 2. Issuer Name and Ticker or Trading Symbol
KLA TENCOR CORP [klac] 		5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
__X__ Director _____ 10% Owner
__X__ Officer (give title below) _____ Other (specify below)
Chairman of the Board
(Last)
(First)
(Middle)

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             1,552 (1) D  
Common Stock             298,000 I KGMW, LP
Common Stock             40,000 I Levy Family Foundation
Common Stock             1,614,375 I by Levy Family Trust
Common Stock - Restricted Stock Units             1,000 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 $ 10.63           08/31/1999 08/31/2008 Common Stock
54,272
  54,272
D
 
Non-Qualified Stock Option $ 16.97           10/23/1999 10/23/2008 Common Stock
220,728
  220,728
D
 
Non-Qualified Stock Option $ 26.25           11/10/2001 11/10/2010 Common Stock
18,951
  18,951
D
 
Non-Qualified Stock Option $ 29.31           10/02/2002 10/02/2011 Common Stock
28,425
  28,425
D
 
Non-Qualified Stock Option $ 32.75           04/04/2002 04/04/2011 Common Stock
18,951
  18,951
D
 
Non-Qualified Stock Option $ 33.75           10/27/2000 10/27/2009 Common Stock
90,000
  90,000
D
 
Non-Qualified Stock Option $ 34.67           11/08/2003 01/28/2013 Common Stock
15,724
  15,724
D
 
Non-Qualified Stock Option $ 37.05           11/08/2003 11/08/2012 Common Stock
7,863
  7,863
D
 
Non-Qualified Stock Option $ 40.66           10/27/2004 08/02/2014 Common Stock
4,500
  4,500
D
 
Non-Qualified Stock Option $ 41.79           09/21/2005 09/21/2014 Common Stock
50,000
  50,000
D
 
Non-Qualified Stock Option $ 44.6875           08/13/2000 08/13/2010 Common Stock
37,901
  37,901
D
 
Non-Qualified Stock Option $ 45.16           10/27/2004 04/26/2014 Common Stock
7,500
  7,500
D
 
Non-Qualified Stock Option $ 47.95           09/26/2006 09/26/2012 Common Stock
15,000
  15,000
D
 
Non-Qualified Stock Option $ 51.229           11/08/2003 07/30/2013 Common Stock
7,863
  7,863
D
 
Non-Qualified Stock Option $ 53.86           10/27/2004 10/27/2013 Common Stock
12,000
  12,000
D
 
Non-Qualified Stock Option $ 58.10           10/27/2004 01/27/2014 Common Stock
6,000
  6,000
D
 

Reporting Owners

Reporting Owner Name / Address Relationships
Director 10% Owner Officer Other
LEVY KENNETH
160 RIO ROBLES
SAN JOSE, CA 95134		   X     Chairman of the Board  

Signatures

Kenneth Levy 08/14/2006
**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 411 shares purchased through the Employee Stock Purchase Plan during the fiscal year.
 
Remarks:
Voluntary filing of Form 5 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.