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 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(h) of the Investment Company Act of 1940

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(Print or Type Responses)

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 (Month/Day/Year) 11/06/2008 (Street) SOLON, OH 44139 4. If Amendment, Date Original Filed(Month/Day/Year) 6. Individual or Joint/Group Filing(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 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 11/06/2008   M   3,375 A (1) 3,375 D   Common Shares 11/06/2008   F   1,129 D $ 3.62 2,246 D

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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 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

05/20/2005(2)

05/19/2013

Common Shares

20,000

20,000

D

Common Share Option

$ 18.75

02/15/2005(3)

07/16/2014

Common Shares

25,000

25,000

D

Common Share Option

$ 15.05

10/04/2007(2)

10/03/2015

Common Shares

8,800

8,800

D

Performance Award Unit

(1)

11/06/2008

M

3,375 (1)

09/30/2008(4)

(4)

Common Shares

3,375 (1)

$ 0 (1)

0 (1)

D

Common Share Option

$ 14

01/30/2009(2)

01/30/2017

Common Shares

9,600

9,600

D

Performance Award Unit

$ 0

09/30/2009(4)

(4)

Common Shares

7,300 (4)

7,300 (4)

D

Common Share Option

$ 9.12

11/09/2009(2)

11/09/2017

Common Shares

8,300

8,300

D

Performance Award Unit

$ 0

09/30/2010(4)

(4)

Common Shares

6,300 (4)

6,300 (4)

D

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		11/10/2008
**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)	Each Performance Award Unit represents a right to receive one common share. The number of Performance Award Units initially granted was a target amount, and the number of Performance Award Units that vested and converted to common 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, 2008. Performance Award Units that did not vest were forfeited.
(2)	Date reported applies to 50% of total, one-half of the balance is then exercisable in each succeeding year.
(3)	Option became fully vested on February 15, 2005
(4)	Each Performance Award Unit represents the right to receive one common share. The number of units initially awarded, the target, is shown above. The actual number of units that will be awarded and converted to shares is 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 ends on the date exercisable (the "vesting date"). Awarded units are automatically converted to shares under the Plan on or before the December 31st following the Vesting Date.

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