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. 3)

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. 3 (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 and Amendment No. 2 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.

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 first paragraph under the question entitled “ARE KLA-TENCOR EXECUTIVE OFFICERS AND NON-EMPLOYEE DIRECTORS ELIGIBLE TO PARTICIPATE IN THE OFFER?” is deleted in its entirety and replaced with the following language: “Our executive officers and non-employee members of our Board of Directors are not eligible to participate in the Offer.” The first sentence of the second paragraph under the question entitled “ARE KLA-TENCOR EXECUTIVE OFFICERS AND NON-EMPLOYEE DIRECTORS ELIGIBLE TO PARTICIPATE IN THE OFFER?” is amended to read as follows: “However, Richard Wallace, our Chief Executive Officer holds certain stock options that would have been Eligible Options but for the fact that the exercise prices for those options were amended on terms similar to the terms of this Offer on December 28, 2006.” The third paragraph under the question entitled “ARE KLA-TENCOR EXECUTIVE OFFICERS AND NON-EMPLOYEE DIRECTORS ELIGIBLE TO PARTICIPATE IN THE OFFER?” is deleted in its entirety. The second paragraph under the question entitled “WHAT DOES KLA-TENCOR THINK OF THE OFFER?” is deleted in its entirety and replaced with the following language: “Our executive officers and non-employee members of our Board of Directors are not eligible to participate in the Offer. (Pages 31-32)”.

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 second and third paragraphs in the Section entitled “Eligible Optionees” of Item 1 are deleted in their entirety and replaced with the following language: “Our executive officers and non-employee members of our Board of Directors are not eligible to participate in the Offer.”

The information set forth in Item 12 of the Offer to Amend or Replace, entitled “Interests of Directors and Officers; Transactions and Arrangements Concerning the Options; and Material Agreements with Directors and Officers” is hereby amended as follows: The second paragraph of Item 12 is deleted in its entirety and replaced with the following language: “Our executive officers and non-employee members of our Board of Directors are not eligible to participate in the Offer.” The first sentence of the third paragraph of Item 12 is amended to read as follows: “However, Richard Wallace, our Chief Executive Officer holds certain stock options that would have been Eligible Options but for the fact that the exercise prices for those options were amended on December 28, 2006 on terms similar to the terms of this Offer.” The sixth paragraph of Item 12 is deleted in its entirety.

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Exhibit (a)(22) to this Amendment is hereby filed as Exhibit (a)(22) to the Schedule TO.

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

(a) Not applicable.

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SIGNATURE

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Amendment No. 3 to Schedule TO is true, complete and correct.

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INDEX OF EXHIBITS