<PAGE>   1





                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C.  20549

                                   FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
OF 1934 [FEE REQUIRED].

For fiscal year ended, SEPTEMBER 30, 1996        Commission file number 1-9965
                       ------------------                               -------

                          KEITHLEY INSTRUMENTS, INC.
                         (Exact name of registrant as
                           specified in its charter)

                OHIO                                     34-0794417       
----------------------------------------    -----------------------------------
(State of incorpoation or organization)    (I.R.S. Employer Identification No.)

   28775 AURORA ROAD, SOLON, OHIO                           44139            
----------------------------------------    -----------------------------------
(Address of principal executive offices)                  (Zip Code)


Registrant's telephone number, including area code     (216) 248-0400   
                                                   ----------------------

Securities registered pursuant to Section 12(b) of the Act:


COMMON SHARES, WITHOUT PAR VALUE                 NEW YORK STOCK EXCHANGE
--------------------------------         -------------------------------------
     (Title of each class)               (Name of exchange on which registered)


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.  Yes   X          No
                                         ---            ---

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [   ]

As of December 17, 1996 there were outstanding 4,656,850 Common Shares, without
par value, and 2,794,278 Class B Common Shares, without par value.  At that
date, the aggregate market value of the Common Shares of the Registrant held by
non-affiliates was $42,227,722 and the aggregate market value of the Class B
Common Shares of the Registrant held by non-affiliates was $1,100,549 for a
total aggregate market value of all classes of Common Shares held by
non-affiliates of $43,328,271.  While the Class B Common Shares are not listed
for public trading on any exchange or market system, shares of that class are
convertible into Common Shares at any time on a share-for-share basis.  The
market values indicated were calculated based upon the last sale price of the
Common Shares as reported by the New York Stock Exchange on December 17, 1996,
which was $9.875.  For purposes of this information, the 380,625 Common Shares
and 2,682,830 Class B Common Shares which were held by the officers and
Directors of the Company were deemed to be voting stock held by affiliates.

                      DOCUMENTS INCORPORATED BY REFERENCE
<TABLE>
<CAPTION>
DOCUMENT                                                                                         Part of 10-K
--------                                                                                         ------------
<S> <C>                                                                                          <C>
1.  Annual report to shareholders for the fiscal year ended September 30, 1996                   Parts I and II
    (only the portions listed in this report).
2.  Proxy statement for the annual meeting of shareholders to be held on February 15, 1997       Part III
    (only the portions listed in this report).
</TABLE>
<PAGE>   2
                           KEITHLEY INSTRUMENTS, INC.

                               10-K ANNUAL REPORT


                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
PART I:                   PAGE
                          ----
<S>                       <C>                                                                    <C>
         Item 1.          Business                                                                 1
         Item 2.          Properties                                                               9
         Item 3.          Legal Proceedings                                                      10
         Item 4.          Submission of Matters to a Vote of Security Holders                    10

PART II:

         Item 5.          Market for the Registrant's Common Equity and Related
                            Stockholder Matters                                                  13
         Item 6.          Selected Financial Data                                                13
         Item 7.          Management's Discussion and Analysis of Financial
                            Condition and Results of Operations                                  13
         Item 8.          Financial Statements and Supplementary Data                            13
         Item 9.          Changes in and Disagreements with Accountants on
                            Accounting and Financial Disclosure                                  13

PART III.

         Item 10.         Directors and Executive Officers of the Registrant                     14
         Item 11.         Executive Compensation                                                 14
         Item 12.         Security Ownership of Certain Beneficial Owners and
                            Management                                                           14
         Item 13.         Certain Relationships and Related Transactions                         14

PART IV:

         Item 14.         Exhibits, Financial Statement Schedules and Reports on
                            Form 8-K                                                             15
</TABLE>

<PAGE>   3
                                    PART I.

ITEM 1 - BUSINESS.

General

         Keithley Instruments, Inc. is a corporation which was founded in 1946
and organized under the laws of the State of Ohio on October 1, 1955.  Its
principal executive offices are located at 28775 Aurora Road, Solon, Ohio
44139; telephone (216) 248-0400. References herein to the "Company" or
"Keithley" are to Keithley Instruments, Inc. and its subsidiaries unless the
context indicates otherwise.

Products

         Keithley Instruments, Inc. provides instrumentation to semiconductor
manufacturers, medical equipment manufacturers, and growth segments of the
electronics industry.  Scientists and engineers around the world use Keithley's
advanced hardware and software for measurement, test, data acquisition, and
control.  Although the Company's products vary in capability, sophistication,
use, size and price, they basically test, measure, and analyze electrical and
physical properties. As such, the Company considers its business to be in a
single industry segment.  For each of the last three fiscal years, more than
90% of the Company's revenue was derived from the sale of electronic test and
measurement instrumentation and data acquisition and analysis hardware and
software, which represents one class of similar products.

         The operating units and product groups of the Company are described
below:

         INSTRUMENTS DIVISION. The Instruments Division designs, develops,
manufactures and markets sensitive electronic instrumentation used in
production test and research for measuring a wide range of electrical
properties such as voltage, resistance, current, capacitance and charge.
Prices for the Instruments Division's products generally range from $1,000 to
$10,000 and included the following product groups:

            Digital Multimeters.  This product line includes a range of
            instruments that are designed to cover measurements of voltage,
            resistance, and current for production test, design and
            development, and research applications.  Each digital multimeter
            has a computer interface for integration into automated test and
            measurement systems.  Typical applications include testing
            electrical components such as resistor networks and thermistors,
            and end products which include cellular telephones, computer disk
            drives, and pace makers.

            Sensitive Instruments.  This product group includes electrometers,
            picoammeters, sensitive digital voltmeters, micro-ohmmeters, and
            certain other instruments which are distinguished by their extreme
            sensitivity, resolution and accuracy as compared to the
            capabilities of conventional meters.  Sensitive instruments are
            used by scientists, engineers, and researchers for the study of
            materials, semiconductors, and superconductors.  Typical customers
            are industrial and government research laboratories, educational
            institutions, and electronics manufacturers.





                                       1
<PAGE>   4
            Switches and Sources.  Switching instruments are used to route
            electrical signals in test systems to measurement and source
            instrumentation.  This allows many devices or test points to be
            measured with a minimum number of instruments.  Switch products
            together with Sensitive, Digital Multimeter, Source, I-V and C-V
            instruments can be integrated into computer-based systems to
            provide flexible, automated testing and measurement.  The switching
            product line allows Keithley to provide a complete measurement
            solution to customers in production test, semi-conductor
            characterization, and materials research applications.

            Sources generate the precise voltage and currents needed to test
            electronic devices and investigate properties of materials.  Source
            products are sold to scientists and engineers in research,
            semiconductor and electronic manufacturing markets, especially
            where stable signals of low level current and voltage are needed.
            These sources can be interfaced with computers as part of an
            automated test system, or used manually on the laboratory bench.

            Source Measure Units.  These are programmable instruments capable
            of sourcing and measuring voltage and current, thus replacing the
            functionality of four instruments with one reliable, compact unit.
            These versatile instruments cover a wide dynamic range of voltage
            and current and their combination of high speed and resolution have
            made these units ideal for high volume production testing of
            electronic components for computers, automotive, and wireless
            telecommunications products.  The source measure units also provide
            the measurement sensitivity needed for materials research and
            semiconductor characterization applications.

            C-V (Capacitance versus Voltage).  C-V products include
            high-frequency and quasistatic C-V meters, measurement and analysis
            software, and computer-based test systems.  C-V products are used
            by scientists and engineers in semiconductor manufacturing
            facilities, industrial and governmental research laboratories, and
            educational institutions to research, develop, and characterize
            semiconductor devices, materials and manufacturing processes.

         SEMICONDUCTOR DIVISION. The Semiconductor Division designs, develops,
manufactures and markets automatic parametric test systems and process
monitoring solutions used by semiconductor manufacturers to measure various
electrical characteristics of semiconductor materials.  Its products can be
found in semiconductor fabrication facilities throughout the world, and consist
of two main groups:

            APT Products.  The Company is one of the leading suppliers of these
            automatic parametric test systems for semiconductor production
            applications.  In production, the systems allow manufacturers to
            monitor quality control parameters during fabrication of integrated
            circuits to improve manufacturing yields.  In research, the systems
            are used to analyze the characteristics of semiconductor materials
            in the development of integrated circuit devices.  The systems can
            also be used to develop integrated circuit manufacturing processes.
            A typical system incorporates Keithley instrumentation and software
            and computer hardware manufactured by others.  The 




                                       2
<PAGE>   5
            system's major components are integrated, and in most cases,
            customized to customer specification.  Installation and servicing of
            the equipment and software, and customer training are also provided.
            Selling prices for these products generally range from $100,000 to
            $250,000.  In February 1996, Keithley purchased the principal assets
            of Turner Engineering Technology (Turner). Turner developed wafer
            test structures used for determining the quality of semiconductor
            wafers at various stages of manufacturing. These test structures
            will allow the company's APT systems to determine the quality of
            both the wafer and the manufacturing process much earlier than with
            previous test methods.

            Oxide Monitoring System.  Quantox(R) is the first product based on
            the direct wafer measurement or non-contact technology licensed
            from International Business Machines in May 1994.  The measurement
            data Quantox provides are used to detect and identify the types of
            charges present on semiconductor wafers.  Charge is a critical
            indicator that tells the semiconductor production engineer whether
            or not the manufacturing process is "in spec."  This measurement is
            made within minutes using Quantox, replacing a procedure that used
            to take up to five days.  During fiscal 1996 the company incurred
            costs to develop and market Quantox, with the first revenues from
            Quantox recognized in the third quarter of fiscal 1996.  The
            selling price for a Quantox unit is approximately $500,000
            depending upon the options purchased.

         RADIATION MEASUREMENTS DIVISION.  The Radiation Measurements Division
designs, develops, manufactures and markets products and systems that
accurately measure the radiation emission levels of x-ray machines and nuclear
radiation sources and are used to calibrate radiation therapy and x-ray
equipment in hospitals and manufacturing processes.  Customers include
hospitals, diagnostic x-ray equipment manufacturers, radiation researchers and
physicists and field service organizations.  Selling prices for standard
products range from $500 to $10,500 per instrument, and products designed and
manufactured for specific customer applications sell for up to $100,000.  In
December 1995, Keithley purchased the principal assets of International Sensor
Technology, Inc. (IST).  IST pioneered the development of laser heating
technology in thermoluminescence dosimetry systems for personal radiation
protection.  The Radiation Measurements Division is fulfilling current and
expected future contracts with the U.S. Navy and will commercialize the
technology over the next few years.

         PC MEASUREMENTS DIVISION.  This newly formed Division combines
Keithley MetraByte with the company's Network Measurements business.  Keithley
MetraByte designs, develops, manufactures and markets a wide range of data
acquisition and analysis hardware and software products designed for use with
personal computers and workstations.  These products are used in thousands of
applications worldwide wherever a number of variables must be monitored and
analyzed quickly.  Selling prices for these products generally range from $100
to $3,000.

         These products are marketed under the brand names Keithley MetraByte
and Acculex and are composed of the following product groups:

            Plug-in data acquisition boards provide data acquisition
            capabilities in the form of a board that is installed into a slot
            of the computer.  The Company offers a wide range





                                       3
<PAGE>   6
            of plug-in data acquisition boards in terms of the number of
            channels, input ranges and sampling rates.  They are marketed
            worldwide to researchers and scientists engaged in laboratory
            automation and experimentation, as well as to engineers involved
            with process control and data collection applications.  These
            products are marketed primarily through direct marketing and
            catalog mailings.

            Software products are specialized personal computer-based
            scientific data acquisition, analysis and graphics software
            products.  Scientists and engineers often combine Keithley software
            together with data acquisition hardware or test and measurement
            instrumentation of other manufacturers.  The software products are
            used with personal computers.

            Acculex products include digital panel meters and panel printers.
            These products display machine parameters, capture results for
            permanent storage and enunciate alarms.  These products are
            marketed primarily through direct marketing and catalog mailings.

            Distributed I/O products include Keithley's WORKHORSE and MetraBus
            product offerings.  These products are primarily used in industrial
            monitoring and control applications.

            Communication products include IEEE-488 bus interfaces and software
            for interfacing computers with programmable measurement
            instrumentation.  These products are marketed through direct
            marketing and catalog mailings.

            Data Acquisition Instruments include personal computer-based
            workstations that collect data from, and provide control over, a
            variety of test and measurement modules.  A typical workstation
            consists of a standard software package and hardware external to
            the personal computer that utilizes various plug-in module cards
            that allow a user to customize the workstation for a specific
            application, including research, product test and pilot plant
            process monitoring.

            Personal Computer Instrument Products (PCIP) are instruments
            contained entirely on boards that fit  into an expansion slot of
            almost any personal computer.  Included in the PCIP offering are a
            digital multimeter, scanner oscilloscope, function generator and a
            counter. Applications include bench top engineering and automatic
            production testing.  These products are marketed primarily through
            direct marketing and catalog mailings.

         The company's Network Measurements business recently introduced
SmartLink(TM), a new line of intelligent measurement modules that allow
laboratory-grade measurements virtually anywhere due to their small size.  The
compact modules connect directly to a sensor or signal source creating no need
for extra hardware.  Each module has on-board signal processing capabilities to
provide linearization, date/time stamping alarming.  That allows them to
deliver useful information directly to a monitoring, control of data
acquisition system.  Selling prices for these products generally range from
$1,000 to $2,250.





                                       4
<PAGE>   7
         AGENCY PRODUCTS.  The Company markets and distributes certain products
manufactured by approximately nine test and measurement companies.  These
products are marketed and distributed primarily by the Company's European
operations and are complementary to, but not competitive with, products
manufactured by the Company.


New Products During Fiscal Year 1996

         Several new products were introduced during fiscal 1996 including the
following:

         The Instruments Division introduced several new products including the
Model 2010 7-1/2-digit digital multimeter which rounds out the company's 2000
Series family.  The Model 2400 digital source meter designed specifically for
the electronic component industry, is very suitable for a wide range of
electronics manufacturing applications.

         The Semiconductor Division introduced several new products including
the Model S600 parametric test system which is expected to be available for
shipping the second half of fiscal 1997.  The Division also acquired Turner
Engineering Technology, a company which specializes in accelerated test method
for determining the quality of semiconductor wafers at various stages of
manufacturing.  Turner's line of Wafer- Level Reliability test structures and
software allow manufacturers to fully characterize the lifetime reliability of
their semiconductor wafers and have opened the door to incremental sales of the
company's parametric test systems.

         The Radiation Measurements Division acquired International Sensor
Technology, Inc. (IST) during the year.  The commercialization of IST's
patented technology, which provides increased speed and accuracy for personal
radiation protection, is another growth opportunity for the company in the
years ahead.

         The PC Measurements Division introduced the new SmartLink(TM) modules
discussed previously, as well as several new Keithley MetraByte products
including the DAS-1700 line of PC plug-in data acquisition boards.  All
DAS-1700 boards are supported by Windows 3.1X, 95 and NT drivers, so users can
migrate their existing data acquisition applications to new Windows
environments.  The DAS-1700 series offers users a midrange data acquistion
board with many of the features and functions of higher-end systems at a much
lower cost.  These boards are applied in industrial, product development,
educational and scientific/research organizations.

Geographic Markets and Distribution

         During fiscal 1996, substantially all of the Company's products were
manufactured in Ohio and Massachusetts and were sold throughout the world in
many developed countries. The Company's principal markets are the United
States, Europe and the Pacific Basin.  At the end of fiscal 1996, the company
announced that it would relocate its Keithley MetraByte operation to Solon,
Ohio during fiscal 1997.

         In the United States, the Company's products are sold by the Company's
sales personnel, independent sales representatives and through direct marketing
and catalog mailings.





                                       5
<PAGE>   8
United States sales offices are located in Solon, Ohio and Santa Clara,
California.  The Company markets its products directly in European countries in
which it has a wholly owned sales subsidiary and through distributors in other
countries.  European subsidiaries have sales and service offices located in or
near London, Munich, Paris, Amsterdam, Zurich and Milan.  The Company also has
sales offices in Belgium, China and India.  Sales in markets outside the above
names locations are made through independent sales representatives and
distributors.  The Company's Japanese subsidiary supports independent sales
representatives and distributors in the Pacific Basin.

Sources and Availability of Raw Materials

         The Company's products require a wide variety of electronic and
mechanical components, most of which are purchased.  The Company has multiple
sources for the vast majority of the components and materials it uses; however,
there are some instances where the components are obtained from a sole-source
supplier.  If a sole-source supplier ceased to deliver, the Company could
experience a temporary adverse impact on its operations; however, management
believes alternative sources could be developed quickly.  Although shortages of
purchased materials and components have been experienced from time to time,
these items have generally been available to the Company as needed.

Patents

         Electronic instruments of the nature the Company designs, develops and
manufactures can not generally be patented in their entirety.  Although the
Company holds patents with respect to certain of its products, it does not
believe that its business is dependent to any material extent upon any single
patent or group of patents, because of the rapid rate of technological change
in the industry.

Seasonal Trends and Working Capital Requirements

         Although the Company is not subject to significant seasonal trends,
its business is cyclical and is somewhat dependent upon the semiconductor
industry in particular.  The Company does not have any unusual working capital
requirements.

Customers

         The Company's customers generally are involved in engineering research
and development, product testing, electronic service or repair, and educational
and governmental research.  During the fiscal year ended September 30, 1996 no
one customer accounted for more than 10% of the Company's sales. Management
believes that the loss of any one of its customers would not materially affect
the sales or net income of the Company.





                                       6
<PAGE>   9
Backlog

         The Company's backlog of unfilled orders amounted to approximately
$9,087,000 as of September 30, 1996 and approximately $11,284,000 as of
September 30, 1995.  It is expected that the majority of the orders included in
the 1996 backlog will be delivered during fiscal 1997; however, the Company's
past experience indicates that a small portion of orders included in the
backlog may be canceled.

Competitive Conditions

         The Company competes on the basis of quality, performance, service,
warranty and price, with quality and performance frequently being dominant.
There are many firms in the world engaged in the manufacture of electronic
measurement instruments, some of which are larger and have greater financial
resources than the Company.  The Company's competitors vary between product
lines and certain manufacturers compete with the Company in multiple product
lines.  The Company's principal competitors are Hewlett-Packard Company,
National Instruments, Inc., Fluke Corporation, Data Translation, Inc. and
Advantest Corporation.

Research and Development

         The Company's engineering development activities are directed toward
the development of new products that will complement, replace or add to the
products currently included in the Company's product line.  The Company does
not perform basic research, but on an ongoing basis utilizes new component and
software technologies in the development of its products.  The highly technical
nature of the Company's products and the rapid rate of technological change in
the industry require a large and continuing commitment to engineering
development efforts.  Product development expenses were $18,337,000 in 1996,
$15,385,000 in 1995 and $11,551,000 in 1994, or approximately 15%, 14% and 13%
of net sales, respectively, for each of the last three fiscal years.  Research
contracts are not obtained from customers.  As discussed earlier, during 1996
the Company acquired the principal assets of IST.  IST's activities included a
government research and development contract for the Navy which was concluded
during 1996.  The amount spent by the company on this contract was not
material.  During fiscal 1994, the Company expensed $3,300,000 to acquire the
right to develop and commercialize direct wafer measurement technology from
International Business Machines.

Government Regulations

         The Company believes that its current operations and its current uses
of property, plant and equipment conform in all material respects to applicable
laws and regulations.  The Company has not experienced, nor does it anticipate,
any material claim or material capital expenditure in connection with
environmental laws and other regulations.





                                       7
<PAGE>   10
Employees

         As of September 30, 1996, the Company employed 716 persons, 107 of
whom were located outside the United States.  None of the Company's employees
are covered under the terms of a collective bargaining agreement and the
Company believes that relations with its employees are good.

Foreign Operations and Export Sales

         Information related to foreign and domestic operations and export
sales is incorporated by reference to Note J of the Notes to the Consolidated
Financial Statements on page 31 of the Company's 1996 Annual Report to
Shareholders, a copy of which is filed as Exhibit 13 to this report.

         The Company has significant revenues from outside the United States
which increase the complexity and risk to the Company.  These risks include
increased exposure to the risk of foreign currency fluctuations and the
potential economic and political impacts from conducting business in foreign
countries.  With the exception of changes in the value of foreign currencies
which is not possible to predict, the Company believes that its foreign
subsidiaries and other larger international markets are in countries where the
economic and political climate is generally stable.





                                       8
<PAGE>   11
ITEM 2 - PROPERTIES.

         The Company believes that the facilities owned and leased by it are
well maintained, adequately insured and suitable for their present and intended
uses.  Pertinent information concerning the principal properties of the Company
and its subsidiaries is as follows:


<TABLE>
<CAPTION>
                              Type of                                               Acreage (Land)
Owned Properties              Facility                                         Square Footage (Building)
----------------              --------                                         -------------------------
<S>                           <C>                                       <C>
    Location
    --------

    Solon, Ohio               Executive offices,
                              Engineering, Manufacturing,                        26.1 Acres
                              Marketing and Sales                                125,000 square feet

    Solon, Ohio               Engineering, Manufacturing,
                              Marketing, Sales, Service and                      7.0 Acres
                              Administration                                     76,000 square feet

    Solon, Ohio               Marketing and Administration,                      5.5 Acres
                              Space is available for expansion with              50,000 square feet
                              the majority leased to other parties.              (4,000 square feet
                                                                                 utilized by the Co.)

                                                                                             Lease
                              Type of                                   Square             Expiration
Leased Properties             Facility                                  Footage               Date   
-----------------             --------                                  -------           -----------

    Location
    --------

    Taunton,                  Manufacturing, Marketing,
    Massachusetts             Service and Administration                   41,000       June 30, 1998

    Taunton,                  Engineering, Sales
    Massachusetts             and Administration                           31,000       June 30, 1998

    Solon, Ohio               Engineering, Manufacturing,                  40,000       October 13, 2006
                              Marketing, Sales, Service
                              and Administration

    Solon, Ohio               Manufacturing, and                           21,600       March 31, 2002
                              Administration

    Santa Clara,              Sales and Service                             4,355       October 15, 1998
    California
</TABLE>





                                       9
<PAGE>   12
<TABLE>
<CAPTION>
                                                                                         Lease
                              Type of                              Square             Expiration
Location                      Facility                            Footage                Date    
--------                      --------                            -------             -----------
<S>                           <C>                                   <C>            <C>
Munich,                       Sales, Service and                    27,750         March 31, 2001;
Germany                       Administration                                       renewable

London, England               Sales and Service                      5,600         July 24, 2009

Paris, France                 Sales and Service                      3,456         June 30, 1998

Zurich,                       Sales and Service                      3,229         September 30, 1997
Switzerland                                                                        renewable

Amsterdam,                    Sales and Service                      2,906         March 31, 2002
Netherlands

Milan,                        Sales and Service                      2,691         August 31, 2001
Italy
</TABLE>


ITEM 3 - LEGAL PROCEEDINGS.

         The Company is not a party to any material litigation.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         Not applicable.





                                       10
<PAGE>   13
EXECUTIVE OFFICERS OF THE REGISTRANT:

         The description of executive officers is included pursuant to
Instruction 3 to Section (b) of Item 401 of Regulation S-K under the Securities
and Exchange Act of 1934.

         The following table sets forth the names of all executive officers of
the Company and certain other information relating to their position held with
the Company and other business experience.

<TABLE>
<CAPTION>
Executive Officer                         Age        Recent Business Experience
-----------------                         ---        --------------------------
<S>                                       <C>        <C>
Joseph P. Keithley                        48         Chairman of the Board of Directors since 1991, Chief
                                                     Executive officer since November 1993 and President
                                                     since May 1994.  Vice Chairman of the Board of
                                                     Directors from 1988 to 1991.  Executive Vice President
                                                     from 1989 to 1991.

Joseph F. Keithley                        81         Founder of the Company in 1946; President to 1973,
                                                     Chairman of the Board of Directors from 1955 to 1991.

Philip R. Etsler                          46         Vice President Human Resources of the Company since
                                                     1990. Director of Personnel from 1986 to 1990.

James B. Griswold                         50         Secretary and a Director of the Company since 1988;
                                                     partner in the law firm of Baker & Hostetler from 1982
                                                     to present.

Hermann Hamm                              57         Vice President of European Operations of the Company
                                                     since 1986.

Frederick R. Hume                         53         Senior Vice President Strategic Planning and Technology
                                                     since November 1996.  Previously Senior Vice President
                                                     Test Instrumentation Group from February 1993 to
                                                     October 1996. Vice President Test Instrumentation Group
                                                     from August 1992 to February 1993.  Vice President
                                                     Instrument Division of the Company from May 1988 to
                                                     August 1992.

Mark J. Plush                             47         Controller since 1982 and Officer of the Company since
                                                     1989.
</TABLE>





                                       11
<PAGE>   14
<TABLE>
<CAPTION>
Executive Officer                         Age        Recent Business Experience
-----------------                         ---        --------------------------
<S>                                       <C>        <C>
Ronald M. Rebner                          52         Vice President and Chief Financial Officer of the
                                                     Company since 1981.

Gabriel A. Rosica                         56         Senior Vice President since February 1996.  Previously
                                                     Chief Operating Officer of Bailey Controls Company from
                                                     August 1994 to January 1996 and Senior Vice President
                                                     of Systems Operations of Bailey Controls Company from
                                                     January 1992 to July 1994.

Terrence E. Sheridan                      56         Vice President Radiation Measurements Division since
                                                     1978.
</TABLE>





                                       12
<PAGE>   15
                                    PART II.

ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED      
         STOCKHOLDER MATTERS.

         The information required by this Item is incorporated herein by
reference under the caption Stock Market Price and Cash Dividends appearing on
page 33 of the Keithley Instruments, Inc. 1996 Annual Report to Shareholders, a
copy of which is filed as Exhibit 13 to this Report.

         The approximate number of shareholders of record of Common Shares and
Class B Common Shares, including those shareholders participating in the
Dividend Reinvestment Plan, as of December 17, 1996 was 1,950.

ITEM 6 - SELECTED FINANCIAL DATA.

         The information required by this Item is incorporated herein by
reference to the eleven year summary, appearing on pages 34 and 35 of the
Keithley Instruments, Inc. 1996 Annual Report to Shareholders, a copy of which
is filed as Exhibit 13 to this Report.

ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS.

         The information required by this Item is incorporated herein by
reference to pages 23 through 25 of the Keithley Instruments, Inc. 1996 Annual
Report to Shareholders, a copy of which is filed as Exhibit 13 to this Report.

ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

         The Consolidated Financial Statements, appearing on pages 20 through
22 and pages 25 through 31, the Unaudited Quarterly Results of Operations
appearing on page 33 of the Keithley Instruments, Inc. 1996 Annual Report to
Shareholders, together with the report thereon of Price Waterhouse LLP dated
November 14, 1996, appearing on page 32 of the Keithley Instruments, Inc.
Annual Report to Shareholders is filed as Exhibit 13 to this Report.

ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE.

         None.





                                       13
<PAGE>   16
                                   PART III.

ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

         The information required by this item relating to the Directors is
incorporated herein by reference to the information set forth under the caption
Election of Directors in the Company's Proxy Statement to be used in
conjunction with the February 15, 1997 Annual Meeting of Shareholders and filed
with the Securities and Exchange Commission pursuant to Section 14(a) of the
Securities Exchange Act of 1934.  The information required for an
identification of executive officers is included on pages 11 and 12 of this
Form 10-K Annual Report.

ITEM 11 - EXECUTIVE COMPENSATION.

         The information required by this item relating to executive
compensation is incorporated herein by reference to the information set forth
under the caption Executive Compensation and Benefits in the Company's Proxy
Statement to be used in conjunction with the February 15, 1997 Annual Meeting
of Shareholders and filed with the Securities and Exchange Commission pursuant
to Section 14(a) of the Securities Exchange Act of 1934.

ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         The information required by this item relating to security ownership
of certain beneficial owners and management is incorporated herein by reference
to the information set forth under the caption Principal Shareholders in the
Company's Proxy Statement to be used in conjunction with the February 15, 1997
Annual Meeting of Shareholders and filed with the Securities and Exchange
Commission pursuant to Section 14(a) of the Securities Exchange Act of 1934.


ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         James B. Griswold, a Director and nominee for Director, is a partner
in the law firm of Baker & Hostetler.  Baker & Hostetler served as general
legal counsel to the Company during the fiscal year ended September 30, 1996
and is expected to render services in such capacity to the Company in the
future.





                                       14
<PAGE>   17
                                    PART IV.

ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)(1)  FINANCIAL STATEMENTS OF THE COMPANY

         The following documents are filed as part of this report:

1.  Consolidated Balance Sheet as of September 30, 1996 and 1995.

2.  Consolidated Statement of Income for each of the three years ended
    September 30, 1996.

3.  Consolidated Statement of Cash Flows for each of the three years ended
    September 30, 1996.

4.  Consolidated Statement of Earnings Reinvested in the Business for each of
    the three years ended September 30, 1996.

5.  Notes to Consolidated Financial Statements.

6.  Report of Independent Accountants dated November 14, 1996.

(a)(2)  FINANCIAL STATEMENT SCHEDULES

The following additional information should be read in conjunction with the
Consolidated Financial Statements of the Company described in Item 14(a)(1):

Schedule II  Valuation and Qualifying Accounts

Schedules other than those listed above are omitted because they are not
required or not applicable, or because the information is furnished elsewhere
in the consolidated financial statements or the notes thereto.





                                       15
<PAGE>   18
(A)(3)  INDEX TO EXHIBITS

<TABLE>
<CAPTION>
                                                                                           Page Number
                                                                                            Sequential
Exhibit                                                                                     Numbering
Number                 Exhibit                                                                System
------                 -------                                                                ------
<S>          <C>                                                                                   <C>
3(a)         Amended Articles of Incorporation, as amended on February 11, 1985.
             (Reference is made to Exhibit 3(a) of the Company's Form 10 Registration
             Statement (File No. 0-13648) as declared effective on July 31, 1985, which
             Exhibit is incorporated herein by reference.)                                           
                                                                                                   --
3(b)         Code of Regulations, as amended on February 11, 1985.  (Reference is made to
             Exhibit 3(b) of the Company's Form 10 Registration Statement (File No. 0-
             13648) as declared effective on July 31, 1985, which Exhibit is incorporated
             herein by reference.)                                                                 --

3(c)         Amended Articles of Incorporation, as amended on February 10, 1996.
             (Reference is made to Exhibit 3(c) of the Company's Quarterly Report on Form
             10-Q for the fiscal quarter ended March 31, 1996 (File No. 1-9965), which
             Exhibit is incorporated herein by reference.)                                         --

4(a)         Specimen Share Certificate for the Common Shares, without par value.
             (Reference is made to Exhibit 4(a) of the Company's Quarterly Report on Form
             10-Q for the fiscal quarter ended June 30, 1988 (File No. 1-9965), which
             Exhibit is incorporated herein by reference.)                                         --

4(b)         Specimen Share Certificate for the Class B Common Shares, without par value.
             (Reference is made to Exhibit 4(b) of the Company's Form 10 Registration
             Statement (File No. 0-13648) as declared effective on July 31, 1985, which
             Exhibit is incorporated herein by reference.)                                         --

*10(a)       1984 Stock Option Plan, adopted in February 1984.                                     --

*10(c)       1984 Deferred Compensation Plan, adopted in February 1984.                            --

             *Reference is made to the appropriate Exhibits of the Company's Form 10
             Registration Statement (File No. 0-13648) as declared effected on July 31,
             1985, which Exhibits are incorporated herein by reference.
</TABLE>





                                       16
<PAGE>   19
<TABLE>
<CAPTION>
                                                                                           Page Number
                                                                                            Sequential
Exhibit                                                                                     Numbering
Number                 Exhibit                                                                System
------                 -------                                                                ------
<S>          <C>                                                                                   <C>
10(k)        Employment Agreement with Joseph F. Keithley dated September 26, 1988.
             (Reference is made to Exhibit 10(k) of the Company's Annual Report on Form
             10-K for the year ended September 30, 1988 (File No. 1-9965), which Exhibit
             is incorporated herein by reference.)                                                   
                                                                                                   --

10(l)        Employment Agreement with Joseph P. Keithley dated September 26, 1988.
             (Reference is made to Exhibit 10(l) of the Company's Annual Report on Form
             10-K for the year ended September 30, 1988 (File No. 1-9965), which Exhibit
             is incorporated herein by reference.)                                                   
                                                                                                   --

10(o)        Form of Supplemental Executive Retirement Plan, adopted in January 1988.
             (Reference is made to Exhibit 10(o) of the Company's Annual Report on Form
             10-K for the year ended September 30, 1988 (File No. 1-9965), which Exhibit
             is incorporated herein by reference.)                                                   
                                                                                                   --
10(q)        1992 Stock Incentive Plan, adopted in December 1991.  (Reference is made to
             Exhibit 10(q) of the Company's Annual Report on form 10-K for the year ended
             September 30, 1991 (File No. 1-9965) which Exhibit is incorporated herein by
             reference.)                                                                           --

10(r)        1992 Directors' Stock Option Plan, adopted in December 1991.  (Reference is
             made to Exhibit 10(r) of the Company's Annual Report on form 10-K for the
             year ended September 30, 1991 (File No. 1-9965) which Exhibit is
             incorporated herein by reference.)                                                    --

10(u)        Credit Agreement dated as of May 31, 1994 by and among Keithley Instruments,
             Inc. and certain borrowing subsidiaries and the Banks named herein, and NBD
             Bank, N.A., as Agent.  (Reference is made to Exhibit 10(u) of the Company's
             Quarterly Report on form 10-Q for the quarter ended June 30, 1994 (File No.
             1-9965) which Exhibit is incorporated herein by reference.)                             
                                                                                                   --
</TABLE>





                                       17
<PAGE>   20
<TABLE>
<CAPTION>
                                                                                           Page Number
                                                                                            Sequential
Exhibit                                                                                     Numbering
Number                 Exhibit                                                                System
------                 -------                                                                ------
<S>          <C>                                                                                  <C>
10(v)        Contactless Testing Technology Licensing Agreement between International
             Business Machines Corporation and Keithley Instruments, Inc., effective as
             of May 26, 1994.  (Reference is made to Exhibit 10(v) of the Company's
             Annual Report on form 10-K for the year ended September 30, 1994 (File No.
             1-9965) which Exhibit is incorporated herein by reference.)                             
                                                                                                   --
10(x)        1996 Outside Directors Deferred Stock Plan.  (Reference is made to Exhibit
             10(x) of the Company's Quarterly Report on Form 10-Q for the fiscal quarter
             ended March 31, 1996 (File No. 1-9965), which Exhibit is incorporated herein
             by reference.)                                                                        --

11           Statement Re Computation of Per Share Earnings.                                       24

13           Annual Report to Shareholders for the Fiscal Year Ended September 30, 1996.          25-59

21           Subsidiaries of the Company.                                                          60

23           Consent of Experts.                                                                   61

27           Financial Data Schedule (EDGAR version only).                                         --
</TABLE>



ITEM 14(B)  REPORTS ON FORM 8-K.

No reports on Form 8-K were filed during the last quarter of the Company's
fiscal year ended September 30, 1996.

ITEM 14(C)  EXHIBITS:  See "Index to Exhibits" at Item 14(a)(3) above.

ITEM 14(D)  FINANCIAL STATEMENT SCHEDULES:  Schedules required to be filed in
response to this portion of Item 14 are listed above in Item 14(a)(2).





                                       18
<PAGE>   21
                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

Keithley Instruments, Inc.
(Registrant)

By:   /s/    Joseph P. Keithley                
    ---------------------------------
           Joseph P. Keithley, (Chairman, President and Chief Executive Officer)

Date:        December 7, 1996                  

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities on the date indicated.

<TABLE>
<CAPTION>
Signature                                   Title                                                      Date
---------                                   -----                                                      ----
<S>                                         <C>                                                      <C>
/s/ Joseph P. Keithley                      Chairman of the Board of Directors, President and        12/7/96
-----------------------                     Chief Executive Officer                                         
    Joseph P. Keithley                      (Principal Executive Officer)

/s/ Joseph F. Keithley                      Founder and Director                                     12/7/96
------------------------------                                                                              
    Joseph F. Keithley

/s/ Ronald M. Rebner                        Vice President and Chief Financial Officer               12/7/96
--------------------                        (Principal Financial and Accounting Officer) and a              
    Ronald M. Rebner                        Director                                          

/s/ Dr. Theodore M. Alfred                  Director                                                 12/7/96
--------------------------                                                                                  
    Dr. Theodore M. Alfred

/s/ Brian R. Bachman                        Director                                                 12/7/96
--------------------                                                                                        
    Brian R. Bachman

/s/ James T. Bartlett                       Director                                                 12/7/96
---------------------                                                                                       
    James T. Bartlett

/s/ Arden L. Bement, Jr.                    Director                                                 12/7/96
------------------------                                                                                    
    Dr. Arden L. Bement, Jr.

/s/ James B. Griswold                       Director                                                 12/7/96
---------------------                                                                                       
    James B. Griswold

/s/ Leon J. Hendrix, Jr.                    Director                                                 12/7/96
------------------------                                                                                    
    Leon J. Hendrix, Jr.

/s/ R. Elton White                          Director                                                 12/7/96
------------------                                                                                          
    R. Elton White
</TABLE>





                                       19
<PAGE>   22
Report of Independent Accountants on
Financial Statement Schedule



To the Board of Directors of
Keithley Instruments, Inc.


Our audits of the consolidated financial statements referred to in our report
dated November 14, 1996 appearing on page 32 of the 1996 Annual Report to
Shareholders of Keithley Instruments, Inc., (which report and consolidated
financial statements are incorporated by reference in this Annual Report on
Form 10-K) also included an audit of the Financial Statement Schedule listed in
Item 14(a)(2) of this Form 10-K.  In our opinion, this Financial Statement
Schedule presents fairly, in all material respects, the information set forth
therein when read in conjunction with the related consolidated financial
statements.




PRICE WATERHOUSE LLP

Cleveland, Ohio
November 14, 1996





                                       20
<PAGE>   23
                                                                     SCHEDULE II
                           KEITHLEY INSTRUMENTS, INC.
                       VALUATION AND QUALIFYING ACCOUNTS
                           (In Thousands of Dollars)




<TABLE>
<CAPTION>
Column A                            Column B              Column C               Column D              Column E
--------                            --------              --------               --------              --------
                                   Balance at         Charged to Costs                              Balance at End
Description                    Beginning of Period      and Expenses          Deductions (1)          of Period
-----------                    -------------------    ----------------        --------------          ---------   
<S>                                  <C>                   <C>                    <C>                   <C>
For the Year Ended
September 30, 1996:

Valuation allowance for
deferred tax assets                  $2,606                 $467                   $79                  $2,994

For the Year Ended
September 30, 1995:

Valuation allowance for
deferred tax assets                  $3,330                 $  80                 $  804                $2,606

For the Year Ended
September 30, 1994:

Valuation allowance for
deferred tax assets                  $3,314                $  548                 $  532                $3,330
</TABLE>


(1) Represents utilization of foreign tax credits.





                                       21