UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE TO

(Rule 13e-4)

TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1)

OF THE SECURITIES EXCHANGE ACT OF 1934

(AMENDMENT NO. 2)

KLA-TENCOR CORPORATION

(Name of Subject Company (Issuer) and Filing Person (Offeror))

Options to Purchase Shares of Common Stock, Par Value $0.001 Per Share

(Title of Class of Securities)

482480100

(CUSIP Number of Class of Securities)

(Underlying Common Stock)

Jeffrey L. Hall

Senior Vice President and Chief Financial Officer

KLA-Tencor Corporation

160 Rio Robles

San Jose, California 95134

(408) 875-3000

(Name, address and telephone number of person authorized to receive notices and communications on behalf of filing person)

Copy to:

S. James DiBernardo, Esq.

Jill Mather Bartow, Esq.

Morgan, Lewis, & Bockius LLP

Two Palo Alto Square

Palo Alto, California 94306

(650) 843-4000

CALCULATION OF FILING FEE

Introductory Statement

This Amendment No. 2 (this “Amendment”) amends and supplements the Tender Offer Statement on Schedule TO (the “Schedule TO”) filed with the Securities and Exchange commission (the “SEC”) on February 27, 2007, relating to our offer to amend or replace outstanding “Eligible Options” (as defined in the Offer to Amend or Replace attached to the Schedule TO as Exhibit (a)(1)) held by current employees subject to taxation in the United States so that those options will not be subject to Section 409A of the Internal Revenue Code. Except as amended and supplemented hereby and by Amendment No. 1 thereto, all terms of the Schedule TO and the Offer to Amend or Replace and all disclosure set forth in the Schedule TO and Exhibits thereto remain unchanged.

COVER PAGE AND INTRODUCTION

The information set forth in the Cover Page and Introduction to the Offer to Amend or Replace is hereby amended as follows: The third sentence of the second paragraph on page ii of the Offer to Amend or Replace is deleted in its entirety and replaced with the following language: “The Cash Bonus will be paid on the Company’s first regularly scheduled payroll date after January 1, 2008, which is scheduled to be January 10, 2008.” The first sentence of the second to the last paragraph on page iv of the Offer to Amend or Replace is deleted in its entirety and replaced with the following language: “The Cash Bonus will be paid on the Company’s first regularly scheduled payroll date after January 1, 2008, which is scheduled to be January 10, 2008.”

SUMMARY TERM SHEET

The information set forth in the Summary Term Sheet of the Offer to Amend or Replace is hereby amended as follows: The sixth sentence of the first paragraph under the question entitled “WHAT ARE THE COMPONENTS OF THE OFFER?” is deleted in its entirety and replaced with the following language: “The Cash Bonus will be paid on the Company’s first regularly scheduled payroll date after January 1, 2008, which is scheduled to be January 10, 2008.” The first sentence of the second paragraph under the question entitled “WHEN WILL MY ELIGIBLE OPTIONS BE AMENDED OR REPLACED?” is amended to read as follows: “As soon as administratively practicable after the Amendment Date, we will deliver to you a final and complete Amendment Agreement that will reflect the adjustment to the exercise price of each of your Amended Options and the Company’s unconditional obligation to pay you on its first regularly scheduled payroll date after January 1, 2008, the Cash Bonus calculated for each Amended Option.” The last sentence under the question entitled “WHAT ARE SOME OF THE KEY DATES TO REMEMBER?” is hereby deleted in its entirety and replaced with the following language: “The Cash Bonus will be paid on the Company’s first regularly scheduled payroll date after January 1, 2008, which is scheduled to be January 10, 2008.”

The information set forth in Item 1 of the Offer to Amend or Replace, entitled “Eligible Optionees; Eligible Options; Amendment of Eligible Options and Cash Bonus; New Options; Expiration Date; Additional Considerations” is hereby amended as follows: The third sentence of the third paragraph in the Section entitled “Amendment of Eligible Options and Cash Bonus” of Item 1 is deleted in its entirety and replaced with the following language: “The Cash Bonus will be paid on the Company’s first regularly scheduled payroll date after January 1, 2008, which is scheduled to be January 10, 2008.” The sentence comprising the final paragraph of the Section entitled “Amendment of Eligible Options and Cash Bonus” of Item 1 is deleted in its entirety and replaced with the following language: “Your Cash Bonus will be paid on the Company’s first regularly scheduled payroll date after January 1, 2008, which is scheduled to be January 10, 2008, and will be subject to the Company’s collection of all applicable withholding taxes.”

2

The information set forth in Item 4 of the Offer to Amend or Replace, entitled “Procedures for Tendering Eligible Options,” is hereby amended as follows: The third sentence of the last paragraph in Item 4 is deleted in its entirety and replaced with the following language: “Schedule I to that agreement will indicate the Adjusted Exercise Price in effect for each of your Amended Options and the Company’s obligation to pay you on its first regularly scheduled payroll date after January 1, 2008, the Cash Bonus calculated for each Amended Option.”

The information set forth in Item 6 of the Offer to Amend or Replace, entitled “Acceptance of Eligible Options for Amendment or Replacement and Commitment to Pay Cash Bonus with Respect to Amended Options,” is hereby amended as follows: The fourth sentence of the second paragraph in Item 6 is deleted in its entirety and replaced with the following language: “Schedule I to that agreement will reflect the increases to the exercise prices of the Amended Options and the Company’s unconditional obligation to pay such Eligible Optionee the applicable Cash Bonus for each of his or her Amended Options on its first regularly scheduled payroll date after January 1, 2008, which is scheduled to be January 10, 2008.”

The information set forth in Item 7 of the Offer to Amend or Replace, entitled “Conditions of the Offer,” is hereby amended as follows: Clause (b) of Item 7 is amended to read as follows: “(b) we shall have been unable to obtain exemptive relief from the prompt payment provisions of Rules 13e-4(f)(5) and 14e-1(c) under the 1934 Act, as they may apply to the scheduled payment of the Cash Bonuses on the Company’s first regularly scheduled payroll date following January 1, 2008;”

The information set forth in Item 9 of the Offer to Amend or Replace, entitled “Source and Amount of Consideration; Terms of Amended Options or New Options,” is hereby amended as follows: The second sentence of the third paragraph of Item 9 is deleted in its entirety and replaced with the following language: “The Cash Bonus will be paid from KLA-Tencor’s general assets on its first regularly scheduled payroll date after January 1, 2008, which is scheduled to be January 10, 2008, and you will be a general creditor of KLA-Tencor with respect to the Cash Bonus.”

The information set forth in Item 14 of the Offer to Amend or Replace, entitled “Legal Matters; Regulatory Approvals,” is hereby amended as follows: The first sentence of the second paragraph of Item 14 is deleted in its entirety and replaced with the following language: “We will not be able to complete the Offer unless we obtain exemptive relief from the prompt payment provisions of Rules 13e-4(f)(5) and 14e-1(c) under the 1934 Act, as they may apply to the scheduled payment of the Cash Bonuses on the Company’s first regularly scheduled payroll date following January 1, 2008.”

3

Pursuant to this Amendment, Exhibits (a)(3), (a)(12) and (a)(16) to the Schedule TO are hereby amended in their entirety to read as set forth in, and to be replaced by, Exhibits (a)(3), (a)(12) and (a)(16), respectively, to this Amendment. In addition, Exhibits (a)(17) and (a)(21) to this Amendment are hereby filed as Exhibits (a)(17) and (a)(21) to the Schedule TO.

4

ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3.

(a) Not applicable.

5

SIGNATURE

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Amendment No. 2 to Schedule TO is true, complete and correct.

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INDEX OF EXHIBITS