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

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES
                                                                                  
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Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public
Utility Holding Company Act of 1935 or Section 30(f) of the Investment Company Act of 1940
                      

1. Name and Address of Reporting Person *

PENDERGRASS LARRY L 		2. Issuer Name and Ticker or Trading Symbol

KEITHLEY INSTRUMENTS INC [ KEI ] 		5. Relationship of Reporting Person(s) to Issuer (Check all applicable)

_____ Director                      _____ 10% Owner
__ X __ Officer (give title below)      _____ Other (specify below)
VP New Product Development
(Last)          (First)          (Middle)

KEITHLEY INSTRUMENTS, INC., 28775 AURORA ROAD 		3. Date of Earliest Transaction (MM/DD/YYYY)

10/27/2010
(Street)

SOLON, OH 44139
(City)        (State)        (Zip)
4. If Amendment, Date Original Filed (MM/DD/YYYY)

 
6. Individual or Joint/Group Filing (Check Applicable Line)

_ X _ Form filed by One Reporting Person
___ Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1.Title of Security
(Instr. 3) 		2. Trans. Date 2A. Deemed Execution Date, if any 3. Trans. Code
(Instr. 8) 		4. Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4 and 5) 		5. Amount of Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 3 and 4) 		6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4)
Code V Amount (A) or (D) Price
Common Shares   10/27/2010     M    6300   (1) A   (1) 8546   D    
Common Shares   10/27/2010     F    2013   (2) D $21.53   6533   D    

Table II - Derivative Securities Beneficially Owned ( e.g. , puts, calls, warrants, options, convertible securities)
1. Title of Derivate Security
(Instr. 3) 		2. Conversion or Exercise Price of Derivative Security 3. Trans. Date 3A. Deemed Execution Date, if any 4. Trans. 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 7. Title and Amount of Securities Underlying Derivative Security
(Instr. 3 and 4) 		8. Price of Derivative Security
(Instr. 5) 		9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4) 11. Nature of Indirect Beneficial Ownership (Instr. 4)
Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
Common Share Option   $12.43                    5/20/2005   (3) 5/19/2013   Common Shares   20000     20000   D    
Common Share Option   $18.75                    2/15/2005   (4) 7/16/2014   Common Shares   25000     25000   D    
Common Share Option   $15.05                    10/4/2007   (3) 10/3/2015   Common Shares   8800     8800   D    
Common Share Option   $14.00                    1/30/2009   (3) 1/30/2017   Common Shares   9600     9600   D    
Common Share Option   $9.12                    11/9/2009   (3) 11/9/2017   Common Shares   8300     8300   D    
Performance Award Unit     (1) 10/27/2010     M         6300   (1)   9/30/2010   (1)   (1) Common Shares   6300   (1) $0.00   (1) 0   (1) D    
Common Share Option   $2.99                    2/6/2011   (3) 2/6/2019   Common Shares   17400     17400   D    
Restricted Unit Award   $0.00                      (5)   (5) Common Shares   5800     5800   D    
Common Share Option   $4.26                    12/4/2011   (3) 12/4/2019   Common Shares   13200     13200   D    
Performance Award Unit   $0.00                    9/30/2012   (6)   (6) Common Shares   6600   (6)   6600   (6) D    
Restricted Unit Award   $0.00                      (7)   (7) Common Shares   4400     4400   D    

Explanation of Responses:
( 1)  Each Performance Award Unit represented the right to receive one common share. The number of units initially awarded was a target (as shown in Table II), and the actual number of units that vested and converted to shares (which could range from 0 shares to twice the target number of shares) was based upon: a) the Company's revenue growth as compared to a defined Peer Group and, b) the Company maintaining an acceptable level of profitability during the performance period which ended on September 30, 2010. Based on the Company's performance, the units converted into a number of shares equal to the target number.
( 2)  Shares issuable upon vesting of Performance Award Units were withheld to settle associated tax liabilities.
( 3)  Date reported applies to 50% of total, one-half of the balance is then exercisable in each succeeding year.
( 4)  Option became fully vested on February 15, 2005
( 5)  Restricted unit awards will become fully vested on February 6, 2013. Common shares represented by such vested restricted unit awards will be delivered promptly after such vesting date.
( 6)  Each Performance Award Unit represents a right to receive one common share. The number of units comprising the initial award are adjusted (ranging from a maximum of twice the number of units comprising the initial award, to a minimum of no units), based on award program metrics that compare the Company's total shareholder return performance occurring during the Measurement Period to comparable total shareholder return performance reported by companies in the Russell Microcap Index. Awarded units earned based on these metrics as of September 30, 2012 (the vesting date) are converted to shares under the Plan and will be issued on or before December 31, 2012.
( 7)  Restricted unit awards will become fully vested on December 4, 2013. Common Shares represented by such vested restricted unit awards will be delivered promptly after such vesting date.

Reporting Owners
Reporting Owner Name / Address
Relationships
Director 10% Owner Officer Other
PENDERGRASS LARRY L
KEITHLEY INSTRUMENTS, INC.
28775 AURORA ROAD
SOLON, OH 44139

VP New Product Development

Signatures
Mark J. Plush, Attorney-in Fact 10/29/2010
** Signature of Reporting Person Date


Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* 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).
Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.
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