UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-06378
-----------

TEMPLETON DEVELOPING MARKETS TRUST
-------------------------------------
(Exact name of registrant as specified in charter)

500 East Broward Blvd., Suite 2100, Fort Lauderdale, FL 33394-3091
-------------------------------------------------------------------
(Address of principal executive offices) (Zip code)

Craig S. Tyle, One Franklin Parkway, San Mateo, CA 94403-1906
----------
(Name and address of agent for service)

Registrant's telephone number, including area code: (954) 527-7500
--------------

Date of fiscal year end: 12/31
-----

Date of reporting period: 12/31/08
--------

ITEM 1. REPORTS TO STOCKHOLDERS.

DECEMBER 31, 2008

(GRAPHIC)

ANNUAL REPORT AND SHAREHOLDER LETTER

INTERNATIONAL

TEMPLETON
DEVELOPING MARKETS TRUST

WANT TO RECEIVE THIS DOCUMENT FASTER VIA EMAIL?

Eligible shareholders can sign up for eDelivery at franklintempleton.com. See
inside for details.

(FRANKLIN TEMPLETON INVESTMENTS(R) LOGO)

Franklin - TEMPLETON - Mutual Series

FRANKLIN TEMPLETON INVESTMENTS

GAIN FROM OUR PERSPECTIVE(R)

Franklin Templeton's distinct multi-manager
structure combines the specialized expertise of
three world-class investment management groups--
Franklin, Templeton and Mutual Series.

SPECIALIZED EXPERTISE Each of our portfolio management groups operates
autonomously, relying on its own research and
staying true to the unique investment disciplines
that underlie its success.

FRANKLIN. Founded in 1947, Franklin is a recognized
leader in fixed income investing and also brings
expertise in growth- and value-style U.S. equity
investing.

TEMPLETON. Founded in 1940, Templeton pioneered
international investing and, in 1954, launched what
has become the industry's oldest global fund. Today,
with offices in over 25 countries, Templeton offers
investors a truly global perspective.

MUTUAL SERIES. Founded in 1949, Mutual Series is
dedicated to a unique style of value investing,
searching aggressively for opportunity among what it
believes are undervalued stocks, as well as
arbitrage situations and distressed securities.

TRUE DIVERSIFICATION Because our management groups work independently and
adhere to different investment approaches, Franklin,
Templeton and Mutual Series funds typically have
distinct portfolios. That's why our funds can be
used to build truly diversified allocation plans
covering every major asset class.

RELIABILITY YOU CAN TRUST At Franklin Templeton Investments, we seek to
consistently provide investors with exceptional
risk-adjusted returns over the long term, as well as
the reliable, accurate and personal service that has
helped us become one of the most trusted names in
financial services.

MUTUAL FUNDS | RETIREMENT PLANS | 529 COLLEGE SAVINGS PLANS | SEPARATE ACCOUNTS

(GRAPHIC)

Not part of the annual report

Contents

SHAREHOLDER LETTER ....................................... 1
ANNUAL REPORT
Templeton Developing Markets Trust ....................... 3
Performance Summary ...................................... 8
Your Fund's Expenses ..................................... 13
Financial Highlights and Statement of Investments ........ 15
Financial Statements ..................................... 26
Notes to Financial Statements ............................ 30
Report of Independent Registered Public Accounting Firm .. 41
Tax Designation .......................................... 42
Board Members and Officers ............................... 44
Shareholder Information .................................. 49

Shareholder Letter

Dear Shareholder:

The year 2008 was an extraordinary and stressful time for investors and those of
us who have worked in financial markets for many years. A dramatic, synchronized
global slowdown amid severe economic conditions pushed market volatility to
record levels. Most major equity indexes suffered double-digit losses for the
year, and emerging markets were not immune from the downturn. Emerging markets,
as measured by the Morgan Stanley Capital International (MSCI) Emerging Markets
(EM) Index, underperformed developed markets with a -53.18% total return for the
year.(1) Although this difficult environment is bound to provoke great concern,
we think it is important to put short-term market developments in perspective.
Keep in mind that as daunting as current conditions may be, we have navigated
through other periods of high market volatility, such as the stock market crash
of 1987. We remain committed to our long-term perspective and our value
investment philosophy. Therefore, we view recent declines as potential
opportunities to find bargains that we believe may be well positioned to become
eventual winners. Although conditions remain challenging, our experience gives
us ample reason to be optimistic about future market stabilization and recovery.

(1.) Source: (C) 2009 Morningstar. All Rights Reserved. The information
contained herein: (1) is proprietary to Morningstar and/or its content
providers; (2) may not be copied or distributed; and (3) is not warranted
to be accurate, complete or timely. Neither Morningstar nor its content
providers are responsible for any damages or losses arising from any use of
this information. Past performance is no guarantee of future results. The
MSCI EM Index is a free float-adjusted, market capitalization-weighted
index designed to measure equity market performance in global emerging
markets. The index is unmanaged and includes reinvested dividends. One
cannot invest directly in an index, nor is an index representative of the
Fund's portfolio.

Shareholders who are registered at franklintempleton.com can receive this report
via email by selecting eDelivery options under "My Profile." Not all accounts
are eligible for eDelivery.

NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE

Not part of the annual report | 1

The enclosed annual report for Templeton Developing Markets Trust includes a
discussion about market conditions, investment management decisions and Fund
performance during the period under review. You will also find performance data
and financial information. Please remember that all securities markets
fluctuate, as do mutual fund share prices.

If you would like more frequent updates, franklintempleton.com provides daily
prices, monthly performance figures, portfolio holdings and other information.
You can also access your account, buy and sell shares, read timely articles, and
find helpful financial planning tools. We hope you will take advantage of these
online services.

Historically, patient investors have achieved rewarding results by evaluating
their goals, diversifying their assets globally and maintaining a disciplined
investment program, all hallmarks of the Templeton investment philosophy
developed more than 50 years ago. We continue to recommend investors consult
their financial advisors and review their portfolios to design a long-term
strategy and portfolio allocation that meet their individual needs, goals and
risk tolerance. We firmly believe that most people benefit from professional
advice, and that advice is invaluable as investors navigate changing market
environments.

We thank you for investing with Franklin Templeton, welcome your comments, and
look forward to serving your investment needs in the years ahead.

Sincerely,

/s/ Mark Mobius
Mark Mobius
Executive Chairman
Templeton Asset Management Ltd.

THIS LETTER REFLECTS OUR ANALYSIS AND OPINIONS AS OF DECEMBER 31, 2008. THE
INFORMATION IS NOT A COMPLETE ANALYSIS OF EVERY ASPECT OF ANY MARKET, COUNTRY,
INDUSTRY, SECURITY OR FUND. STATEMENTS OF FACT ARE FROM SOURCES CONSIDERED
RELIABLE.

2 | Not part of the annual report

Annual Report

Templeton Developing Markets Trust

YOUR FUND'S GOAL AND MAIN INVESTMENTS: Templeton Developing Markets Trust seeks
long-term capital appreciation. Under normal market conditions, the Fund invests
at least 80% of its net assets in securities of developing market countries.

PERFORMANCE DATA REPRESENT PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND YOU MAY HAVE
A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. CURRENT PERFORMANCE MAY DIFFER FROM
FIGURES SHOWN. PLEASE VISIT franklintempleton.com OR CALL (800) 342-5236 FOR
MOST RECENT MONTH-END PERFORMANCE.

GEOGRAPHIC BREAKDOWN
Based on Total Net Assets as of 12/31/08*

(BAR CHART)

Asia 42.0%
Latin America & Caribbean 24.8%
Europe 20.2%
Middle East & Africa 13.5%

* Other assets, less liabilities = -0.5%

This annual report for Templeton Developing Markets Trust covers the fiscal year
ended December 31, 2008.

PERFORMANCE OVERVIEW

Templeton Developing Markets Trust - Class A had a -53.91% cumulative total
return for the 12 months ended December 31, 2008. The Fund performed comparably
to its benchmarks, the Morgan Stanley Capital International (MSCI) Emerging
Markets (EM) Index and the Standard & Poor's/International Finance Corporation
Investable (S&P/IFCI) Composite Index, which had total returns of -53.18% and
- -53.74% for the same period. (1) Please note that index performance is purely
for reference and that we do not attempt to track any index, but rather
undertake investments on the basis of fundamental research. You can find the
Fund's long-term performance data in the Performance Summary beginning on page
8.

ECONOMIC AND MARKET OVERVIEW

The year 2008 marked the end of a long bull run in emerging markets that started
in 2003. After surging close to 400% in the previous five-year period, the MSCI
EM Index declined 53.18% in U.S. dollar terms in 2008.1 Our experience has led
us to believe the recent fall is part of a natural bull and bear market cycle.
In emerging markets we have found, in the past, that bull markets have lasted
longer than bear markets and bull markets have tended to more than recover the
losses of the previous bear markets. Please remember, historical performance is
no guarantee of future results.

1. Source: (C) 2009 Morningstar. All Rights Reserved. The information
contained herein: (1) is proprietary to Morningstar and/or its content
providers; (2) may not be copied or distributed; and (3) is not warranted
to be accurate, complete or timely. Neither Morningstar nor its content
providers are responsible for any damages or losses arising from any use of
this information. The MSCI EM Index is a free float-adjusted, market
capitalization-weighted index designed to measure equity market performance
in global emerging markets. The S&P/IFCI Composite Index is a free
float-adjusted, market capitalization-weighted index designed to measure
equity performance of global emerging markets. The indexes are unmanaged
and include reinvested dividends. One cannot invest directly in an index,
nor is an index representative of the Fund's portfolio.

THE DOLLAR VALUE, NUMBER OF SHARES OR PRINCIPAL AMOUNT, AND NAMES OF ALL
PORTFOLIO HOLDINGS ARE LISTED IN THE FUND'S STATEMENT OF INVESTMENTS (SOI). THE
SOI BEGINS ON PAGE 20.

Annual Report | 3

TOP 10 COUNTRIES
12/31/08

% OF TOTAL
NET ASSETS
----------

China 22.8%
Brazil 13.2%
South Africa 10.9%
Mexico 9.2%
Russia 6.4%
Taiwan 5.6%
Turkey 5.5%
U.K. 4.4%
India 4.0%
South Korea 2.0%

Global financial markets this past year experienced some of the worst volatility
since the 1930s. The current crisis began in the U.S. with the unraveling of the
highly leveraged derivative structure of subprime mortgages. Extreme risk
aversion and the resulting lack of liquidity were detrimental to companies that
relied on borrowing and eventually led to a series of major financial firm
collapses in the U.S. and Europe. Investor anxiety surged and market volatility
in developed and emerging markets reached historic levels.

Recognizing the severity of the credit crunch, governments around the world
implemented fiscal stimuli and loosened monetary policies to support their
domestic economies and ease liquidity conditions. Thus far, more than US$1
trillion in total has been pledged globally by countries including China, the
U.S., Germany, the U.K., Taiwan, Spain, Japan, South Korea, Russia, France,
Australia, Hong Kong, Singapore and Malaysia. Government measures, coupled with
stocks trading at distress-level valuations, brought bargain hunters back to the
market. As a result, the MSCI EM Index rebounded and ended the year 25% above
its 2008 low in October.(1)

INVESTMENT STRATEGY

We employ a bottom-up, value-oriented, long-term investment approach. We focus
on the market price of a company's securities relative to our evaluation of its
long-term (typically five years) earnings, asset value and cash flow potential.
We also consider a company's price/earnings ratio, profit margins and
liquidation value. In choosing investments, we strongly believe in on-site
visits to issuers of prospective investments to assess critical factors such as
management strength and local conditions.

MANAGER'S DISCUSSION

During the year under review, the most significant detractors from the Fund's
absolute performance included Turkey's Akbank, one of the country's largest
commercial banks, Russia's Gazprom, the world's largest natural gas producer,
and Chalco (Aluminum Corp. of China), the country's leading alumina and aluminum
products manufacturer. All three stocks significantly declined in value and
underperformed many of their emerging markets peers in 2008. Investor risk
aversion rose toward emerging markets such as Turkey amid the global financial
crisis, and shares of Akbank suffered. Commodity price corrections drove
investors to reduce exposure to energy stocks. Although we

4 | Annual Report

trimmed the Fund's holdings in these stocks to meet funding requirements, we
believed that these companies were well positioned to benefit from continued
demand for their products and services over the longer term.

On the other hand, the most significant contributors to Fund performance
included Zijin Mining Group, a Chinese mining conglomerate primarily engaged in
gold production, and China Coal Energy and China Shenhua Energy, the country's
largest coal producers. We added shares of Zijin Mining Group to the portfolio
in December after price corrections brought the shares down to attractive levels
in our view. As one of China's largest gold miners, Zijin Mining Group has
proven reserves and benefits from economies of scale and cost advantages. We
believe expectations for gold prices to remain relatively high could lead to
higher revenues.

We initiated a position in China Coal Energy and added to our existing position
in China Shenhua Energy as price corrections brought valuations down to what we
considered attractive levels. China Coal Energy is the country's largest thermal
coal exporter, and also engages in the coking business and mining equipment
manufacturing. As an integrated coal-based energy company, China Shenhua Energy
owns one of the two dedicated coal freight rail lines in the country. Based on
our analysis, we believe these companies could benefit from proven reserves,
resilient coal prices in the medium term and long-term demand from industries
such as power generation and steel.

It is also important to recognize the effect of currency movements on the Fund's
performance. In general, if the value of the U.S. dollar goes up compared with a
foreign currency, an investment traded in that foreign currency will go down in
value because it will be worth fewer U.S. dollars. This can have a negative
effect on Fund performance. Conversely, when the U.S. dollar weakens in relation
to a foreign currency, an investment traded in that foreign currency will
increase in value, which can contribute to Fund performance. For the 12 months
ended December 31, 2008, the U.S. dollar increased in value relative to most
non-U.S. currencies. As a result, the Fund's performance was negatively affected
by the portfolio's predominant investment in securities with non-U.S. currency
exposure.

During the reporting period, we increased the Fund's holdings in South Africa,
Taiwan and Chile as we continued to search for attractive investment
opportunities. We also increased the Fund's exposure to select frontier markets,
which we believe have the potential to grow at a relatively fast pace and offer
investors the opportunity to invest in a younger generation of emerging markets.
We made select purchases in Qatar, United Arab Emirates, Kuwait and Oman.

TOP 10 EQUITY HOLDINGS
12/31/08

COMPANY % OF TOTAL
SECTOR/INDUSTRY, COUNTRY NET ASSETS
- ------------------------ ----------

China Mobile Ltd. 5.8%
WIRELESS TELECOMMUNICATION SERVICES, CHINA
ICBC (Industrial and Commercial Bank of China Ltd.), H 2.5%
COMMERCIAL BANKS, CHINA
America Movil SAB de CV, L, ADR 2.4%
WIRELESS TELECOMMUNICATION SERVICES, MEXICO
China Construction Bank Corp., H 2.3%
COMMERCIAL BANKS, CHINA
PetroChina Co. Ltd., H 2.2%
OIL, GAS & CONSUMABLE FUELS, CHINA
Vale (Companhia Vale do Rio Doce), ADR, pfd., A 2.0%
METALS & MINING, BRAZIL
Petrobras (Petroleo Brasileiro SA), ADR, pfd. 2.0%
OIL, GAS & CONSUMABLE FUELS, BRAZIL
TSMC (Taiwan Semiconductor Manufacturing Co. Ltd.) 1.9%
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT, TAIWAN
Kimberly Clark de Mexico SAB de CV, A 1.9%
HOUSEHOLD PRODUCTS, MEXICO
President Chain Store Corp. 1.9%
FOOD & STAPLES RETAILING, TAIWAN

Annual Report | 5

In addition, we made significant purchases in banks. In our view, the continued
liberalization of the financial sector in emerging markets could unlock hidden
value and allow banks to benefit from the growing financial needs of consumers
in these markets. Major additions in this sector included ICBC (Industrial and
Commercial Bank of China) and China Construction Bank, two leading Chinese
commercial banks, HSBC Holdings, one of the world's premier banking and
financial services organizations, and Banco Itau Holding Financeira, a major
financial conglomerate in Brazil.

We also made key purchases in consumer-related sectors that included
broadcasting and cable television, life and health insurance, and brewing
companies. Some key investments were China Life Insurance, the country's leading
life insurance company, Brazil's Ambev (Companhia de Bebidas das Americas), one
of the world's largest beer and soft drink producers, and Grupo Televisa, a
premier Mexican media company. We believe the long-term outlook for consumerism
remained attractive due to relatively higher per-capita income growth and
continued demand for consumer goods and services in emerging markets.

To raise funds for redemptions during the reporting period, we sold a number of
holdings. We sold some other stocks as they reached sale price targets. As a
result, the Fund's exposure to diversified metals and mining, oil and gas,
telecommunication services and electric utilities companies fell. Major sales
included all or part of Vale (Companhia Vale do Rio Doce), one of the world's
largest iron ore producers, Petrobras (Petroleo Brasileiro), Brazil's national
oil and gas company, and China Telecom, the country's leading integrated
telecommunication services provider. We also sold some spin-offs of UES (Unified
Energy System), a Russian electricity production group that was split into
individual companies due to restructuring in the country's power sector.
Geographically, the Fund's investments fell in countries such as Brazil, Russia
and South Korea.

6 | Annual Report

We thank you for your continued participation in Templeton Developing Markets
Trust and look forward to serving your future investment needs.

(PHOTO OF MARK MOBIUS)

/s/ Mark Mobius
Mark Mobius
Executive Chairman
Templeton Asset Management Ltd.

THE FOREGOING INFORMATION REFLECTS OUR ANALYSIS, OPINIONS AND PORTFOLIO HOLDINGS
AS OF DECEMBER 31, 2008, THE END OF THE REPORTING PERIOD. THE WAY WE IMPLEMENT
OUR MAIN INVESTMENT STRATEGIES AND THE RESULTING PORTFOLIO HOLDINGS MAY CHANGE
DEPENDING ON FACTORS SUCH AS MARKET AND ECONOMIC CONDITIONS. THESE OPINIONS MAY
NOT BE RELIED UPON AS INVESTMENT ADVICE OR AN OFFER FOR A PARTICULAR SECURITY.
THE INFORMATION IS NOT A COMPLETE ANALYSIS OF EVERY ASPECT OF ANY MARKET,
COUNTRY, INDUSTRY, SECURITY OR THE FUND. STATEMENTS OF FACT ARE FROM SOURCES
CONSIDERED RELIABLE, BUT THE INVESTMENT MANAGER MAKES NO REPRESENTATION OR
WARRANTY AS TO THEIR COMPLETENESS OR ACCURACY. ALTHOUGH HISTORICAL PERFORMANCE
IS NO GUARANTEE OF FUTURE RESULTS, THESE INSIGHTS MAY HELP YOU UNDERSTAND OUR
INVESTMENT MANAGEMENT PHILOSOPHY.

Annual Report | 7

Performance Summary as of 12/31/08

Your dividend income will vary depending on dividends or interest paid by
securities in the Fund's portfolio, adjusted for operating expenses of each
class. Capital gain distributions are net profits realized from the sale of
portfolio securities. The performance table and graphs do not reflect any taxes
that a shareholder would pay on Fund dividends, capital gain distributions, if
any, or any realized gains on the sale of Fund shares. Total return reflects
reinvestment of the Fund's dividends and capital gain distributions, if any, and
any unrealized gains or losses.

PRICE AND DISTRIBUTION INFORMATION

CLASS A (SYMBOL: TEDMX) CHANGE 12/31/08 12/31/07
- ----------------------- ------- -------- --------

Net Asset Value (NAV) -$17.62 $12.88 $30.50
DISTRIBUTIONS (1/1/08-12/31/08)
Dividend Income $0.5954
Short-Term Capital Gain $0.2007
Long-Term Capital Gain $0.6919
TOTAL $1.4880

CLASS B (SYMBOL: TDMBX) CHANGE 12/31/08 12/31/07
- ----------------------- ------- -------- --------

Net Asset Value (NAV) -$17.18 $12.67 $29.85
DISTRIBUTIONS (1/1/08-12/31/08)
Dividend Income $0.3923
Short-Term Capital Gain $0.2007
Long-Term Capital Gain $0.6919
TOTAL $1.2849

CLASS C (SYMBOL: TDMTX) CHANGE 12/31/08 12/31/07
- ----------------------- ------- -------- --------

Net Asset Value (NAV) -$17.15 $12.61 $29.76
DISTRIBUTIONS (1/1/08-12/31/08)
Dividend Income $0.4102
Short-Term Capital Gain $0.2007
Long-Term Capital Gain $0.6919
TOTAL $1.3028

CLASS R (SYMBOL: TDMRX) CHANGE 12/31/08 12/31/07
- ----------------------- ------- -------- --------

Net Asset Value (NAV) -$17.38 $12.69 $30.07
DISTRIBUTIONS (1/1/08-12/31/08)
Dividend Income $0.5480
Short-Term Capital Gain $0.2007
Long-Term Capital Gain $0.6919
TOTAL $1.4406

ADVISOR CLASS (SYMBOL: TDADX) CHANGE 12/31/08 12/31/07
- ----------------------------- ------- -------- --------

Net Asset Value (NAV) -$17.64 $12.84 $30.48
DISTRIBUTIONS (1/1/08-12/31/08)
Dividend Income $0.6659
Short-Term Capital Gain $0.2007
Long-Term Capital Gain $0.6919
TOTAL $1.5585

8 | Annual Report

Performance Summary (CONTINUED)

PERFORMANCE

CUMULATIVE TOTAL RETURN EXCLUDES SALES CHARGES. AVERAGE ANNUAL TOTAL RETURN AND
VALUE OF $10,000 INVESTMENT INCLUDE MAXIMUM SALES CHARGES. CLASS A: 5.75%
MAXIMUM INITIAL SALES CHARGE; CLASS B: CONTINGENT DEFERRED SALES CHARGE (CDSC)
DECLINING FROM 4% TO 1% OVER SIX YEARS, AND ELIMINATED THEREAFTER; CLASS C: 1%
CDSC IN FIRST YEAR ONLY; CLASS R/ADVISOR CLASS: NO SALES CHARGES.

CLASS A 1-YEAR 5-YEAR 10-YEAR
- ------- ------- ------- ---------

Cumulative Total Return(1) -53.91% +22.45% +85.59%
Average Annual Total Return(2) -56.56% +2.91% +5.75%
Value of $10,000 Investment(3) $ 4,344 $11,545 $17,489
Total Annual Operating Expenses(4) 1.83%

CLASS B 1-YEAR 5-YEAR 10-YEAR
- ------- ------- ------- ---------

Cumulative Total Return(1) -54.26% +18.28% +75.61%
Average Annual Total Return(2) -55.96% +3.11% +5.79%
Value of $10,000 Investment(3) $ 4,404 $11,656 $17,561
Total Annual Operating Expenses(4) 2.55%

CLASS C 1-YEAR 5-YEAR 10-YEAR
- ------- ------- ------- ---------

Cumulative Total Return(1) -54.27% +18.26% +73.30%
Average Annual Total Return(2) -54.70% +3.41% +5.65%
Value of $10,000 Investment(3) $ 4,530 $11,826 $17,330
Total Annual Operating Expenses(4) 2.55%

INCEPTION
CLASS R 1-YEAR 5-YEAR (1/1/02)
- ------- ------- ------- ---------

Cumulative Total Return(1) -54.03% +21.29% +87.13%
Average Annual Total Return(2) -54.03% +3.94% +9.37%
Value of $10,000 Investment(3) $ 4,597 $12,129 $18,713
Total Annual Operating Expenses(4) 2.06%

ADVISOR CLASS 1-YEAR 5-YEAR 10-YEAR
- ------------- ------- ------- ---------

Cumulative Total Return(1) -53.79% +24.38% +91.86%
Average Annual Total Return(2) -53.79% +4.46% +6.73%
Value of $10,000 Investment(3) $ 4,621 $12,438 $19,186
Total Annual Operating Expenses(4) 1.56%

PERFORMANCE DATA REPRESENT PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND YOU MAY HAVE
A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. CURRENT PERFORMANCE MAY DIFFER FROM
FIGURES SHOWN. FOR MOST RECENT MONTH-END PERFORMANCE, SEE "FUNDS AND
PERFORMANCE" AT franklintempleton.com OR CALL (800) 342-5236.

Annual Report | 9

Performance Summary (CONTINUED)

TOTAL RETURN INDEX COMPARISON FOR A HYPOTHETICAL $10,000 INVESTMENT

Total return represents the change in value of an investment over the periods
shown. It includes any current, applicable, maximum sales charge, Fund expenses,
account fees and reinvested distributions. The unmanaged indexes include
reinvestment of any income or distributions. They differ from the Fund in
composition and do not pay management fees or expenses. One cannot invest
directly in an index.

AVERAGE ANNUAL TOTAL RETURN

CLASS A 12/31/08
- ------- --------

1-Year -56.56%
5-Year +2.91%
10-Year +5.75%

CLASS A (1/1/99-12/31/08)

(PERFORMANCE GRAPH)

TEMPLETON DEVELOPING MARKETS S&P 500/IFCI INVESTABLE MSCI EMERGING
DATE TRUST - CLASS A COMPOSITE INDEX MARKETS INDEX
- ---------- ---------------------------- ----------------------- -------------

1/1/1999 $ 9,424 $10,000 $10,000
1/31/1999 $ 8,893 $ 9,758 $ 9,838
2/28/1999 $ 8,948 $ 9,931 $ 9,934
3/31/1999 $10,247 $11,090 $11,251
4/30/1999 $12,159 $12,602 $12,645
5/31/1999 $11,894 $12,377 $12,578
6/30/1999 $12,855 $13,725 $14,005
7/31/1999 $12,269 $13,529 $13,618
8/31/1999 $11,729 $13,675 $13,748
9/30/1999 $11,290 $13,295 $13,279
10/31/1999 $11,629 $13,521 $13,560
11/30/1999 $12,461 $14,736 $14,778
12/31/1999 $14,282 $16,711 $16,664
1/31/2000 $13,623 $16,709 $16,759
2/29/2000 $13,120 $16,692 $16,987
3/31/2000 $13,259 $16,936 $17,084
4/30/2000 $12,148 $15,207 $15,470
5/31/2000 $11,221 $14,784 $14,825
6/30/2000 $12,047 $15,201 $15,326
7/31/2000 $11,570 $14,472 $14,535
8/31/2000 $11,781 $14,527 $14,598
9/30/2000 $10,605 $13,227 $13,323
10/31/2000 $ 9,715 $12,157 $12,356
11/30/2000 $ 9,201 $11,083 $11,275
12/31/2000 $ 9,733 $11,404 $11,547
1/31/2001 $10,864 $12,868 $13,137
2/28/2001 $10,055 $11,877 $12,108
3/31/2001 $ 9,114 $10,853 $10,919
4/30/2001 $ 9,529 $11,496 $11,459
5/31/2001 $ 9,879 $11,844 $11,595
6/30/2001 $ 9,833 $11,630 $11,357
7/31/2001 $ 9,224 $10,835 $10,640
8/31/2001 $ 9,243 $10,688 $10,535
9/30/2001 $ 8,054 $ 9,031 $ 8,904
10/31/2001 $ 8,294 $ 9,591 $ 9,457
11/30/2001 $ 8,801 $10,714 $10,444
12/31/2001 $ 9,172 $11,606 $11,273
1/31/2002 $ 9,664 $12,020 $11,655
2/28/2002 $ 9,683 $12,251 $11,847
3/31/2002 $10,221 $13,106 $12,559
4/30/2002 $10,548 $13,227 $12,641
5/31/2002 $10,501 $13,000 $12,439
6/30/2002 $ 9,848 $12,072 $11,506
7/31/2002 $ 9,308 $11,307 $10,631
8/31/2002 $ 9,280 $11,454 $10,795
9/30/2002 $ 8,580 $10,181 $ 9,630
10/31/2002 $ 8,804 $10,835 $10,255
11/30/2002 $ 9,503 $11,587 $10,961
12/31/2002 $ 9,326 $11,149 $10,597
1/31/2003 $ 9,177 $11,159 $10,551
2/28/2003 $ 9,168 $10,828 $10,266
3/31/2003 $ 8,842 $10,431 $ 9,975
4/30/2003 $ 9,758 $11,495 $10,863
5/31/2003 $10,343 $12,295 $11,643
6/30/2003 $10,683 $13,056 $12,307
7/31/2003 $11,126 $13,758 $13,077
8/31/2003 $11,645 $14,751 $13,955
9/30/2003 $11,985 $14,912 $14,057
10/31/2003 $12,938 $16,123 $15,254
11/30/2003 $13,193 $16,330 $15,441
12/31/2003 $14,282 $17,521 $16,560
1/31/2004 $14,692 $18,120 $17,149
2/29/2004 $15,226 $18,993 $17,940
3/31/2004 $15,211 $19,347 $18,170
4/30/2004 $14,365 $17,884 $16,685
5/31/2004 $14,173 $17,641 $16,356
6/30/2004 $14,442 $17,642 $16,431
7/31/2004 $14,250 $17,279 $16,140
8/31/2004 $14,721 $18,051 $16,816
9/30/2004 $15,490 $19,094 $17,787
10/31/2004 $15,893 $19,646 $18,213
11/30/2004 $17,113 $21,353 $19,900
12/31/2004 $17,917 $22,447 $20,858
1/31/2005 $17,830 $22,501 $20,924
2/28/2005 $19,281 $24,390 $22,761
3/31/2005 $18,378 $22,868 $21,262
4/30/2005 $17,783 $22,355 $20,695
5/31/2005 $18,475 $23,193 $21,424
6/30/2005 $19,060 $23,974 $22,163
7/31/2005 $20,093 $25,634 $23,732
8/31/2005 $20,025 $25,623 $23,945
9/30/2005 $21,634 $28,263 $26,178
10/31/2005 $20,405 $26,422 $24,468
11/30/2005 $21,965 $28,566 $26,494
12/31/2005 $22,969 $30,347 $28,063
1/31/2006 $25,254 $33,603 $31,214
2/28/2006 $25,332 $33,625 $31,185
3/31/2006 $25,562 $34,048 $31,464
4/30/2006 $27,289 $36,909 $33,709
5/31/2006 $24,763 $33,253 $30,185
6/30/2006 $24,378 $33,115 $30,121
7/31/2006 $24,931 $33,539 $30,572
8/31/2006 $25,444 $34,529 $31,366
9/30/2006 $25,385 $34,831 $31,630
10/31/2006 $26,588 $36,391 $33,133
11/30/2006 $28,088 $39,214 $35,601
12/31/2006 $29,468 $41,003 $37,208
1/31/2007 $29,103 $40,532 $36,822
2/28/2007 $28,780 $40,446 $36,609
3/31/2007 $29,912 $42,120 $38,081
4/30/2007 $31,436 $44,239 $39,849
5/31/2007 $32,832 $46,511 $41,833
6/30/2007 $33,844 $48,725 $43,812
7/31/2007 $34,718 $51,196 $46,146
8/31/2007 $33,471 $50,060 $45,181
9/30/2007 $37,403 $55,380 $50,174
10/31/2007 $41,357 $61,393 $55,773
11/30/2007 $37,936 $57,175 $51,823
12/31/2007 $37,945 $57,517 $52,008
1/31/2008 $32,210 $50,127 $45,533
2/29/2008 $34,984 $53,736 $48,911
3/31/2008 $32,160 $51,036 $46,327
4/30/2008 $34,909 $55,015 $50,094
5/31/2008 $35,606 $56,079 $51,038
6/30/2008 $31,687 $50,463 $45,956
7/31/2008 $30,965 $48,690 $44,258
8/31/2008 $28,763 $44,794 $40,738
9/30/2008 $24,984 $36,903 $33,613
10/31/2008 $18,169 $26,749 $24,419
11/30/2008 $16,806 $24,648 $22,582
12/31/2008 $17,489 $26,609 $24,350

AVERAGE ANNUAL TOTAL RETURN

CLASS B 12/31/08
- ------- --------

1-Year -55.96%
5-Year +3.11%
10-Year +5.79%

CLASS B (1/1/99-12/31/08)

(PERFORMANCE GRAPH)

TEMPLETON DEVELOPING MARKETS S&P 500/IFCI INVESTABLE MSCI EMERGING
DATE TRUST - CLASS B COMPOSITE INDEX MARKETS INDEX
- ---------- ---------------------------- ----------------------- -------------

1/1/1999 $10,000 $10,000 $10,000
1/31/1999 $ 9,417 $ 9,758 $ 9,838
2/28/1999 $ 9,476 $ 9,931 $ 9,934
3/31/1999 $10,835 $11,090 $11,251
4/30/1999 $12,854 $12,602 $12,645
5/31/1999 $12,563 $12,377 $12,578
6/30/1999 $13,573 $13,725 $14,005
7/31/1999 $12,942 $13,529 $13,618
8/31/1999 $12,369 $13,675 $13,748
9/30/1999 $11,893 $13,295 $13,279
10/31/1999 $12,233 $13,521 $13,560
11/30/1999 $13,107 $14,736 $14,778
12/31/1999 $15,019 $16,711 $16,664
1/31/2000 $14,311 $16,709 $16,759
2/29/2000 $13,777 $16,692 $16,987
3/31/2000 $13,916 $16,936 $17,084
4/30/2000 $12,739 $15,207 $15,470
5/31/2000 $11,756 $14,784 $14,825
6/30/2000 $12,622 $15,201 $15,326
7/31/2000 $12,116 $14,472 $14,535
8/31/2000 $12,330 $14,527 $14,598
9/30/2000 $11,094 $13,227 $13,323
10/31/2000 $10,160 $12,157 $12,356
11/30/2000 $ 9,615 $11,083 $11,275
12/31/2000 $10,160 $11,404 $11,547
1/31/2001 $11,347 $12,868 $13,137
2/28/2001 $10,481 $11,877 $12,108
3/31/2001 $ 9,498 $10,853 $10,919
4/30/2001 $ 9,926 $11,496 $11,459
5/31/2001 $10,286 $11,844 $11,595
6/30/2001 $10,228 $11,630 $11,357
7/31/2001 $ 9,595 $10,835 $10,640
8/31/2001 $ 9,605 $10,688 $10,535
9/30/2001 $ 8,369 $ 9,031 $ 8,904
10/31/2001 $ 8,613 $ 9,591 $ 9,457
11/30/2001 $ 9,138 $10,714 $10,444
12/31/2001 $ 9,518 $11,606 $11,273
1/31/2002 $10,015 $12,020 $11,655
2/28/2002 $10,034 $12,251 $11,847
3/31/2002 $10,589 $13,106 $12,559
4/30/2002 $10,922 $13,227 $12,641
5/31/2002 $10,863 $13,000 $12,439
6/30/2002 $10,188 $12,072 $11,506
7/31/2002 $ 9,620 $11,307 $10,631
8/31/2002 $ 9,591 $11,454 $10,795
9/30/2002 $ 8,857 $10,181 $ 9,630
10/31/2002 $ 9,082 $10,835 $10,255
11/30/2002 $ 9,806 $11,587 $10,961
12/31/2002 $ 9,611 $11,149 $10,597
1/31/2003 $ 9,464 $11,159 $10,551
2/28/2003 $ 9,444 $10,828 $10,266
3/31/2003 $ 9,095 $10,431 $ 9,975
4/30/2003 $10,030 $11,495 $10,863
5/31/2003 $10,631 $12,295 $11,643
6/30/2003 $10,975 $13,056 $12,307
7/31/2003 $11,418 $13,758 $13,077
8/31/2003 $11,950 $14,751 $13,955
9/30/2003 $12,294 $14,912 $14,057
10/31/2003 $13,269 $16,123 $15,254
11/30/2003 $13,515 $16,330 $15,441
12/31/2003 $14,624 $17,521 $16,560
1/31/2004 $15,040 $18,120 $17,149
2/29/2004 $15,575 $18,993 $17,940
3/31/2004 $15,559 $19,347 $18,170
4/30/2004 $14,680 $17,884 $16,685
5/31/2004 $14,480 $17,641 $16,356
6/30/2004 $14,750 $17,642 $16,431
7/31/2004 $14,540 $17,279 $16,140
8/31/2004 $15,010 $18,051 $16,816
9/30/2004 $15,789 $19,094 $17,787
10/31/2004 $16,188 $19,646 $18,213
11/30/2004 $17,426 $21,353 $19,900
12/31/2004 $18,236 $22,447 $20,858
1/31/2005 $18,136 $22,501 $20,924
2/28/2005 $19,607 $24,390 $22,761
3/31/2005 $18,672 $22,868 $21,262
4/30/2005 $18,057 $22,355 $20,695
5/31/2005 $18,753 $23,193 $21,424
6/30/2005 $19,338 $23,974 $22,163
7/31/2005 $20,376 $25,634 $23,732
8/31/2005 $20,295 $25,623 $23,945
9/30/2005 $21,919 $28,263 $26,178
10/31/2005 $20,658 $26,422 $24,468
11/30/2005 $22,231 $28,566 $26,494
12/31/2005 $23,224 $30,347 $28,063
1/31/2006 $25,514 $33,603 $31,214
2/28/2006 $25,584 $33,625 $31,185
3/31/2006 $25,800 $34,048 $31,464
4/30/2006 $27,525 $36,909 $33,709
5/31/2006 $24,969 $33,253 $30,185
6/30/2006 $24,563 $33,115 $30,121
7/31/2006 $25,100 $33,539 $30,572
8/31/2006 $25,608 $34,529 $31,366
9/30/2006 $25,527 $34,831 $31,630
10/31/2006 $26,724 $36,391 $33,133
11/30/2006 $28,215 $39,214 $35,601
12/31/2006 $29,588 $41,003 $37,208
1/31/2007 $29,221 $40,532 $36,822
2/28/2007 $28,897 $40,446 $36,609
3/31/2007 $30,032 $42,120 $38,081
4/30/2007 $31,561 $44,239 $39,849
5/31/2007 $32,962 $46,511 $41,833
6/30/2007 $33,978 $48,725 $43,812
7/31/2007 $34,854 $51,196 $46,146
8/31/2007 $33,603 $50,060 $45,181
9/30/2007 $37,551 $55,380 $50,174
10/31/2007 $41,520 $61,393 $55,773
11/30/2007 $38,087 $57,175 $51,823
12/31/2007 $38,094 $57,517 $52,008
1/31/2008 $32,338 $50,127 $45,533
2/29/2008 $35,123 $53,736 $48,911
3/31/2008 $32,288 $51,036 $46,327
4/30/2008 $35,049 $55,015 $50,094
5/31/2008 $35,750 $56,079 $51,038
6/30/2008 $31,814 $50,463 $45,956
7/31/2008 $31,088 $48,690 $44,258
8/31/2008 $28,878 $44,794 $40,738
9/30/2008 $25,083 $36,903 $33,613
10/31/2008 $18,241 $26,749 $24,419
11/30/2008 $16,873 $24,648 $22,582
12/31/2008 $17,561 $26,609 $24,350

10 | Annual Report

Performance Summary (CONTINUED)

CLASS C (1/1/99-12/31/08)

(PERFORMANCE GRAPH)

TEMPLETON
DEVELOPING S&P 500/IFCI
MARKETS TRUST INVESTABLE MSCI EMERGING
DATE - CLASS C COMPOSITE INDEX MARKETS INDEX
- ---------- ------------- --------------- -------------

1/1/1999 $10,000 $10,000 $10,000
1/31/1999 $ 9,432 $ 9,758 $ 9,838
2/28/1999 $ 9,481 $ 9,931 $ 9,934
3/31/1999 $10,852 $11,090 $11,251
4/30/1999 $12,880 $12,602 $12,645
5/31/1999 $12,576 $12,377 $12,578
6/30/1999 $13,595 $13,725 $14,005
7/31/1999 $12,958 $13,529 $13,618
8/31/1999 $12,380 $13,675 $13,748
9/30/1999 $11,910 $13,295 $13,279
10/31/1999 $12,262 $13,521 $13,560
11/30/1999 $13,134 $14,736 $14,778
12/31/1999 $15,044 $16,711 $16,664
1/31/2000 $14,339 $16,709 $16,759
2/29/2000 $13,800 $16,692 $16,987
3/31/2000 $13,947 $16,936 $17,084
4/30/2000 $12,762 $15,207 $15,470
5/31/2000 $11,783 $14,784 $14,825
6/30/2000 $12,644 $15,201 $15,326
7/31/2000 $12,135 $14,472 $14,535
8/31/2000 $12,360 $14,527 $14,598
9/30/2000 $11,117 $13,227 $13,323
10/31/2000 $10,176 $12,157 $12,356
11/30/2000 $ 9,638 $11,083 $11,275
12/31/2000 $10,176 $11,404 $11,547
1/31/2001 $11,361 $12,868 $13,137
2/28/2001 $10,509 $11,877 $12,108
3/31/2001 $ 9,520 $10,853 $10,919
4/30/2001 $ 9,951 $11,496 $11,459
5/31/2001 $10,304 $11,844 $11,595
6/30/2001 $10,255 $11,630 $11,357
7/31/2001 $ 9,608 $10,835 $10,640
8/31/2001 $ 9,628 $10,688 $10,535
9/30/2001 $ 8,384 $ 9,031 $ 8,904
10/31/2001 $ 8,629 $ 9,591 $ 9,457
11/30/2001 $ 9,158 $10,714 $10,444
12/31/2001 $ 9,531 $11,606 $11,273
1/31/2002 $10,041 $12,020 $11,655
2/28/2002 $10,050 $12,251 $11,847
3/31/2002 $10,609 $13,106 $12,559
4/30/2002 $10,943 $13,227 $12,641
5/31/2002 $10,894 $13,000 $12,439
6/30/2002 $10,205 $12,072 $11,506
7/31/2002 $ 9,644 $11,307 $10,631
8/31/2002 $ 9,605 $11,454 $10,795
9/30/2002 $ 8,877 $10,181 $ 9,630
10/31/2002 $ 9,103 $10,835 $10,255
11/30/2002 $ 9,831 $11,587 $10,961
12/31/2002 $ 9,625 $11,149 $10,597
1/31/2003 $ 9,477 $11,159 $10,551
2/28/2003 $ 9,457 $10,828 $10,266
3/31/2003 $ 9,115 $10,431 $ 9,975
4/30/2003 $10,054 $11,495 $10,863
5/31/2003 $10,657 $12,295 $11,643
6/30/2003 $11,003 $13,056 $12,307
7/31/2003 $11,448 $13,758 $13,077
8/31/2003 $11,972 $14,751 $13,955
9/30/2003 $12,318 $14,912 $14,057
10/31/2003 $13,287 $16,123 $15,254
11/30/2003 $13,544 $16,330 $15,441
12/31/2003 $14,654 $17,521 $16,560
1/31/2004 $15,071 $18,120 $17,149
2/29/2004 $15,608 $18,993 $17,940
3/31/2004 $15,582 $19,347 $18,170
4/30/2004 $14,710 $17,884 $16,685
5/31/2004 $14,510 $17,641 $16,356
6/30/2004 $14,780 $17,642 $16,431
7/31/2004 $14,570 $17,279 $16,140
8/31/2004 $15,041 $18,051 $16,816
9/30/2004 $15,823 $19,094 $17,787
10/31/2004 $16,223 $19,646 $18,213
11/30/2004 $17,456 $21,353 $19,900
12/31/2004 $18,276 $22,447 $20,858
1/31/2005 $18,166 $22,501 $20,924
2/28/2005 $19,640 $24,390 $22,761
3/31/2005 $18,713 $22,868 $21,262
4/30/2005 $18,097 $22,355 $20,695
5/31/2005 $18,784 $23,193 $21,424
6/30/2005 $19,371 $23,974 $22,163
7/31/2005 $20,412 $25,634 $23,732
8/31/2005 $20,331 $25,623 $23,945
9/30/2005 $21,959 $28,263 $26,178
10/31/2005 $20,695 $26,422 $24,468
11/30/2005 $22,272 $28,566 $26,494
12/31/2005 $23,268 $30,347 $28,063
1/31/2006 $25,565 $33,603 $31,214
2/28/2006 $25,635 $33,625 $31,185
3/31/2006 $25,842 $34,048 $31,464
4/30/2006 $27,572 $36,909 $33,709
5/31/2006 $25,018 $33,253 $30,185
6/30/2006 $24,611 $33,115 $30,121
7/31/2006 $25,150 $33,539 $30,572
8/31/2006 $25,659 $34,529 $31,366
9/30/2006 $25,578 $34,831 $31,630
10/31/2006 $26,779 $36,391 $33,133
11/30/2006 $28,265 $39,214 $35,601
12/31/2006 $29,638 $41,003 $37,208
1/31/2007 $29,253 $40,532 $36,822
2/28/2007 $28,911 $40,446 $36,609
3/31/2007 $30,029 $42,120 $38,081
4/30/2007 $31,539 $44,239 $39,849
5/31/2007 $32,917 $46,511 $41,833
6/30/2007 $33,923 $48,725 $43,812
7/31/2007 $34,766 $51,196 $46,146
8/31/2007 $33,508 $50,060 $45,181
9/30/2007 $37,413 $55,380 $50,174
10/31/2007 $41,351 $61,393 $55,773
11/30/2007 $37,905 $57,175 $51,823
12/31/2007 $37,898 $57,517 $52,008
1/31/2008 $32,155 $50,127 $45,533
2/29/2008 $34,893 $53,736 $48,911
3/31/2008 $32,053 $51,036 $46,327
4/30/2008 $34,778 $55,015 $50,094
5/31/2008 $35,453 $56,079 $51,038
6/30/2008 $31,531 $50,463 $45,956
7/31/2008 $30,780 $48,690 $44,258
8/31/2008 $28,577 $44,794 $40,738
9/30/2008 $24,811 $36,903 $33,613
10/31/2008 $18,039 $26,749 $24,419
11/30/2008 $16,668 $24,648 $22,582
12/31/2008 $17,330 $26,609 $24,350

AVERAGE ANNUAL TOTAL RETURN

CLASS C 12/31/08
- ------- --------

1-Year -54.70%
5-Year +3.41%
10-Year +5.65%

CLASS R (1/1/02-12/31/08)

(PERFORMANCE GRAPH)

TEMPLETON
DEVELOPING S&P 500/IFCI
MARKETS TRUST INVESTABLE MSCI EMERGING
DATE - CLASS R COMPOSITE INDEX MARKETS INDEX
- ---------- ------------- --------------- -------------

1/1/2002 $10,000 $10,000 $10,000
1/31/2002 $10,536 $10,357 $10,339
2/28/2002 $10,556 $10,557 $10,509
3/31/2002 $11,153 $11,293 $11,141
4/30/2002 $11,499 $11,397 $11,213
5/31/2002 $11,448 $11,201 $11,035
6/30/2002 $10,737 $10,402 $10,207
7/31/2002 $10,147 $ 9,743 $ 9,430
8/31/2002 $10,117 $ 9,869 $ 9,576
9/30/2002 $ 9,354 $ 8,773 $ 8,543
10/31/2002 $ 9,588 $ 9,336 $ 9,097
11/30/2002 $10,361 $ 9,984 $ 9,723
12/31/2002 $10,147 $ 9,606 $ 9,400
1/31/2003 $ 9,994 $ 9,615 $ 9,359
2/28/2003 $ 9,984 $ 9,330 $ 9,106
3/31/2003 $ 9,611 $ 8,988 $ 8,848
4/30/2003 $10,601 $ 9,905 $ 9,636
5/31/2003 $11,240 $10,594 $10,328
6/30/2003 $11,612 $11,250 $10,917
7/31/2003 $12,086 $11,855 $11,600
8/31/2003 $12,653 $12,710 $12,379
9/30/2003 $13,014 $12,849 $12,470
10/31/2003 $14,046 $13,892 $13,531
11/30/2003 $14,324 $14,071 $13,697
12/31/2003 $15,507 $15,097 $14,690
1/31/2004 $15,955 $15,613 $15,212
2/29/2004 $16,527 $16,365 $15,914
3/31/2004 $16,511 $16,670 $16,118
4/30/2004 $15,587 $15,410 $14,800
5/31/2004 $15,387 $15,201 $14,509
6/30/2004 $15,670 $15,201 $14,575
7/31/2004 $15,461 $14,888 $14,317
8/31/2004 $15,964 $15,554 $14,917
9/30/2004 $16,805 $16,452 $15,778
10/31/2004 $17,236 $16,928 $16,156
11/30/2004 $18,559 $18,398 $17,653
12/31/2004 $19,426 $19,341 $18,502
1/31/2005 $19,330 $19,388 $18,561
2/28/2005 $20,907 $21,016 $20,191
3/31/2005 $19,918 $19,704 $18,861
4/30/2005 $19,268 $19,262 $18,358
5/31/2005 $20,014 $19,984 $19,004
6/30/2005 $20,654 $20,658 $19,660
7/31/2005 $21,773 $22,088 $21,051
8/31/2005 $21,687 $22,079 $21,241
9/30/2005 $23,435 $24,353 $23,222
10/31/2005 $22,103 $22,767 $21,704
11/30/2005 $23,787 $24,614 $23,501
12/31/2005 $24,870 $26,148 $24,894
1/31/2006 $27,325 $28,954 $27,689
2/28/2006 $27,412 $28,973 $27,663
3/31/2006 $27,652 $29,337 $27,911
4/30/2006 $29,518 $31,803 $29,902
5/31/2006 $26,789 $28,653 $26,776
6/30/2006 $26,358 $28,533 $26,719
7/31/2006 $26,951 $28,899 $27,119
8/31/2006 $27,512 $29,752 $27,824
9/30/2006 $27,436 $30,012 $28,057
10/31/2006 $28,731 $31,357 $29,391
11/30/2006 $30,348 $33,789 $31,581
12/31/2006 $31,832 $35,330 $33,006
1/31/2007 $31,434 $34,925 $32,664
2/28/2007 $31,081 $34,851 $32,474
3/31/2007 $32,295 $36,293 $33,780
4/30/2007 $33,938 $38,119 $35,349
5/31/2007 $35,440 $40,076 $37,109
6/30/2007 $36,523 $41,984 $38,864
7/31/2007 $37,454 $44,114 $40,935
8/31/2007 $36,115 $43,134 $40,078
9/30/2007 $40,342 $47,718 $44,507
10/31/2007 $44,605 $52,899 $49,474
11/30/2007 $40,902 $49,265 $45,970
12/31/2007 $40,916 $49,560 $46,134
1/31/2008 $34,725 $43,192 $40,391
2/29/2008 $37,704 $46,302 $43,387
3/31/2008 $34,656 $43,975 $41,095
4/30/2008 $37,609 $47,404 $44,436
5/31/2008 $38,357 $48,321 $45,273
6/30/2008 $34,126 $43,482 $40,765
7/31/2008 $33,337 $41,954 $39,260
8/31/2008 $30,956 $38,597 $36,137
9/30/2008 $26,890 $31,797 $29,817
10/31/2008 $19,559 $23,049 $21,661
11/30/2008 $18,082 $21,238 $20,032
12/31/2008 $18,713 $22,928 $21,600

AVERAGE ANNUAL TOTAL RETURN

CLASS R 12/31/08
- ------- --------

1-Year -54.03%
5-Year +3.94%
Since Inception (1/1/02) +9.37%

Annual Report | 11

Performance Summary (CONTINUED)

AVERAGE ANNUAL TOTAL RETURN

ADVISOR CLASS 12/31/08
- ------------- --------

1-Year -53.79%
5-Year +4.46%
10-Year +6.73%

ADVISOR CLASS (1/1/99-12/31/08)

TEMPLETON
DEVELOPING S&P 500/IFCI
MARKETS TRUST INVESTABLE MSCI EMERGING
DATE - ADVISOR CLASS COMPOSITE INDEX MARKETS INDEX
- ---------- --------------- --------------- -------------

1/1/1999 $10,000 $10,000 $10,000
1/31/1999 $ 9,436 $ 9,758 $ 9,838
2/28/1999 $ 9,494 $ 9,931 $ 9,934
3/31/1999 $10,875 $11,090 $11,251
4/30/1999 $12,909 $12,602 $12,645
5/31/1999 $12,636 $12,377 $12,578
6/30/1999 $13,658 $13,725 $14,005
7/31/1999 $13,035 $13,529 $13,618
8/31/1999 $12,461 $13,675 $13,748
9/30/1999 $12,004 $13,295 $13,279
10/31/1999 $12,354 $13,521 $13,560
11/30/1999 $13,249 $14,736 $14,778
12/31/1999 $15,195 $16,711 $16,664
1/31/2000 $14,494 $16,709 $16,759
2/29/2000 $13,959 $16,692 $16,987
3/31/2000 $14,114 $16,936 $17,084
4/30/2000 $12,929 $15,207 $15,470
5/31/2000 $11,951 $14,784 $14,825
6/30/2000 $12,831 $15,201 $15,326
7/31/2000 $12,332 $14,472 $14,535
8/31/2000 $12,567 $14,527 $14,598
9/30/2000 $11,305 $13,227 $13,323
10/31/2000 $10,365 $12,157 $12,356
11/30/2000 $ 9,817 $11,083 $11,275
12/31/2000 $10,383 $11,404 $11,547
1/31/2001 $11,604 $12,868 $13,137
2/28/2001 $10,728 $11,877 $12,108
3/31/2001 $ 9,730 $10,853 $10,919
4/30/2001 $10,184 $11,496 $11,459
5/31/2001 $10,559 $11,844 $11,595
6/30/2001 $10,509 $11,630 $11,357
7/31/2001 $ 9,858 $10,835 $10,640
8/31/2001 $ 9,878 $10,688 $10,535
9/30/2001 $ 8,615 $ 9,031 $ 8,904
10/31/2001 $ 8,871 $ 9,591 $ 9,457
11/30/2001 $ 9,424 $10,714 $10,444
12/31/2001 $ 9,819 $11,606 $11,273
1/31/2002 $10,348 $12,020 $11,655
2/28/2002 $10,368 $12,251 $11,847
3/31/2002 $10,957 $13,106 $12,559
4/30/2002 $11,308 $13,227 $12,641
5/31/2002 $11,258 $13,000 $12,439
6/30/2002 $10,566 $12,072 $11,506
7/31/2002 $ 9,985 $11,307 $10,631
8/31/2002 $ 9,965 $11,454 $10,795
9/30/2002 $ 9,213 $10,181 $ 9,630
10/31/2002 $ 9,463 $10,835 $10,255
11/30/2002 $10,235 $11,587 $10,961
12/31/2002 $10,035 $11,149 $10,597
1/31/2003 $ 9,884 $11,159 $10,551
2/28/2003 $ 9,874 $10,828 $10,266
3/31/2003 $ 9,523 $10,431 $ 9,975
4/30/2003 $10,511 $11,495 $10,863
5/31/2003 $11,152 $12,295 $11,643
6/30/2003 $11,529 $13,056 $12,307
7/31/2003 $11,998 $13,758 $13,077
8/31/2003 $12,568 $14,751 $13,955
9/30/2003 $12,935 $14,912 $14,057
10/31/2003 $13,974 $16,123 $15,254
11/30/2003 $14,249 $16,330 $15,441
12/31/2003 $15,425 $17,521 $16,560
1/31/2004 $15,879 $18,120 $17,149
2/29/2004 $16,456 $18,993 $17,940
3/31/2004 $16,451 $19,347 $18,170
4/30/2004 $15,536 $17,884 $16,685
5/31/2004 $15,338 $17,641 $16,356
6/30/2004 $15,630 $17,642 $16,431
7/31/2004 $15,432 $17,279 $16,140
8/31/2004 $15,941 $18,051 $16,816
9/30/2004 $16,784 $19,094 $17,787
10/31/2004 $17,221 $19,646 $18,213
11/30/2004 $18,552 $21,353 $19,900
12/31/2004 $19,432 $22,447 $20,858
1/31/2005 $19,338 $22,501 $20,924
2/28/2005 $20,924 $24,390 $22,761
3/31/2005 $19,943 $22,868 $21,262
4/30/2005 $19,308 $22,355 $20,695
5/31/2005 $20,059 $23,193 $21,424
6/30/2005 $20,705 $23,974 $22,163
7/31/2005 $21,837 $25,634 $23,732
8/31/2005 $21,763 $25,623 $23,945
9/30/2005 $23,520 $28,263 $26,178
10/31/2005 $22,187 $26,422 $24,468
11/30/2005 $23,902 $28,566 $26,494
12/31/2005 $24,996 $30,347 $28,063
1/31/2006 $27,473 $33,603 $31,214
2/28/2006 $27,569 $33,625 $31,185
3/31/2006 $27,820 $34,048 $31,464
4/30/2006 $29,711 $36,909 $33,709
5/31/2006 $26,972 $33,253 $30,185
6/30/2006 $26,553 $33,115 $30,121
7/31/2006 $27,165 $33,539 $30,572
8/31/2006 $27,734 $34,529 $31,366
9/30/2006 $27,670 $34,831 $31,630
10/31/2006 $28,991 $36,391 $33,133
11/30/2006 $30,634 $39,214 $35,601
12/31/2006 $32,152 $41,003 $37,208
1/31/2007 $31,754 $40,532 $36,822
2/28/2007 $31,413 $40,446 $36,609
3/31/2007 $32,649 $42,120 $38,081
4/30/2007 $34,324 $44,239 $39,849
5/31/2007 $35,859 $46,511 $41,833
6/30/2007 $36,976 $48,725 $43,812
7/31/2007 $37,929 $51,196 $46,146
8/31/2007 $36,592 $50,060 $45,181
9/30/2007 $40,884 $55,380 $50,174
10/31/2007 $45,222 $61,393 $55,773
11/30/2007 $41,489 $57,175 $51,823
12/31/2007 $41,514 $57,517 $52,008
1/31/2008 $35,249 $50,127 $45,533
2/29/2008 $38,300 $53,736 $48,911
3/31/2008 $35,208 $51,036 $46,327
4/30/2008 $38,218 $55,015 $50,094
5/31/2008 $38,995 $56,079 $51,038
6/30/2008 $34,704 $50,463 $45,956
7/31/2008 $33,914 $48,690 $44,258
8/31/2008 $31,517 $44,794 $40,738
9/30/2008 $27,379 $36,903 $33,613
10/31/2008 $19,933 $26,749 $24,419
11/30/2008 $18,427 $24,648 $22,582
12/31/2008 $19,186 $26,609 $24,350

ENDNOTES

THE FUND INVESTS IN FOREIGN SECURITIES, WHICH CAN INVOLVE EXPOSURE TO CURRENCY
VOLATILITY AND POLITICAL, ECONOMIC AND REGULATORY UNCERTAINTY. INVESTMENTS IN
DEVELOPING MARKETS INVOLVE HEIGHTENED RISKS RELATED TO THE SAME FACTORS, IN
ADDITION TO THOSE ASSOCIATED WITH THESE MARKETS' SMALLER SIZE AND LESSER
LIQUIDITY. THE FUND'S PROSPECTUS ALSO INCLUDES A DESCRIPTION OF THE MAIN
INVESTMENT RISKS.

CLASS B: These shares have higher annual fees and expenses than Class A
shares.

CLASS C: Prior to 1/1/04, these shares were offered with an initial sales
charge; thus actual total returns would have differed. These
shares have higher annual fees and expenses than Class A shares.

CLASS R: Shares are available to certain eligible investors as described
in the prospectus. These shares have higher annual fees and
expenses than Class A shares.

ADVISOR CLASS: Shares are available to certain eligible investors as described
in the prospectus.

(1.) Cumulative total return represents the change in value of an investment
over the periods indicated.

(2.) Average annual total return represents the average annual change in value
of an investment over the periods indicated.

(3.) These figures represent the value of a hypothetical $10,000 investment in
the Fund over the periods indicated.

(4.) Figures are as stated in the Fund's prospectus current as of the date of
this report.

(5.) Source: (C) 2009 Morningstar. The S&P/IFCI Composite Index is a free
float-adjusted, market capitalization-weighted index designed to measure
equity performance of global emerging markets. The MSCI EM Index is a free
float-adjusted, market capitalization-weighted index designed to measure
equity market performance in global emerging markets.

12 | Annual Report

Your Fund's Expenses

As a Fund shareholder, you can incur two types of costs:

- - Transaction costs, including sales charges (loads) on Fund purchases and
redemption fees; and

- - Ongoing Fund costs, including management fees, distribution and service
(12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs,
sometimes referred to as operating expenses.

The following table shows ongoing costs of investing in the Fund and can help
you understand these costs and compare them with those of other mutual funds.
The table assumes a $1,000 investment held for the six months indicated.

ACTUAL FUND EXPENSES

The first line (Actual) for each share class listed in the table provides actual
account values and expenses. The "Ending Account Value" is derived from the
Fund's actual return, which includes the effect of Fund expenses.

You can estimate the expenses you paid during the period by following these
steps. OF COURSE, YOUR ACCOUNT VALUE AND EXPENSES WILL DIFFER FROM THOSE IN THIS
ILLUSTRATION:

1. Divide your account value by $1,000.

IF AN ACCOUNT HAD AN $8,600 VALUE, THEN $8,600 / $1,000 = 8.6.

2. Multiply the result by the number under the heading "Expenses Paid During
Period."

IF EXPENSES PAID DURING PERIOD WERE $7.50, THEN 8.6 X $7.50 = $64.50.

In this illustration, the estimated expenses paid this period are $64.50.

HYPOTHETICAL EXAMPLE FOR COMPARISON WITH OTHER FUNDS

Information in the second line (Hypothetical) for each class in the table can
help you compare ongoing costs of investing in the Fund with those of other
mutual funds. This information may not be used to estimate the actual ending
account balance or expenses you paid during the period. The hypothetical "Ending
Account Value" is based on the actual expense ratio for each class and an
assumed 5% annual rate of return before expenses, which does not represent the
Fund's actual return. The figure under the heading "Expenses Paid During Period"
shows the hypothetical expenses your account would have incurred under this
scenario. You can compare this figure with the 5% hypothetical examples that
appear in shareholder reports of other funds.

Annual Report | 13

Your Fund's Expenses (CONTINUED)

PLEASE NOTE THAT EXPENSES SHOWN IN THE TABLE ARE MEANT TO HIGHLIGHT ONGOING
COSTS AND DO NOT REFLECT ANY TRANSACTION COSTS, SUCH AS SALES CHARGES OR
REDEMPTION FEES. Therefore, the second line for each class is useful in
comparing ongoing costs only, and will not help you compare total costs of
owning different funds. In addition, if transaction costs were included, your
total costs would have been higher. Please refer to the Fund prospectus for
additional information on operating expenses.

BEGINNING ACCOUNT ENDING ACCOUNT EXPENSES PAID DURING
VALUE 7/1/08 VALUE 12/31/08 PERIOD* 7/1/08-12/31/08
----------------- -------------- -----------------------

CLASS A
Actual $1,000 $ 551.90 $ 7.41
Hypothetical (5% return before expenses) $1,000 $1,015.58 $ 9.63
CLASS B
Actual $1,000 $ 549.80 $10.28
Hypothetical (5% return before expenses) $1,000 $1,011.86 $13.35
CLASS C
Actual $1,000 $ 549.60 $10.24
Hypothetical (5% return before expenses) $1,000 $1,011.91 $13.30
CLASS R
Actual $1,000 $ 551.10 $ 8.34
Hypothetical (5% return before expenses) $1,000 $1,014.38 $10.84
ADVISOR CLASS
Actual $1,000 $ 552.80 $ 6.40
Hypothetical (5% return before expenses) $1,000 $1,016.89 $ 8.31

* Expenses are calculated using the most recent six-month expense ratio,
annualized for each class (A: 1.90%; B: 2.64%; C: 2.63%; R: 2.14%; and
Advisor: 1.64%), multiplied by the average account value over the period,
multiplied by 184/366 to reflect the one-half year period.

14 | Annual Report

Templeton Developing Markets Trust

FINANCIAL HIGHLIGHTS

YEAR ENDED DECEMBER 31,
------------------------------------------------------------------
CLASS A 2008 2007 2006 2005 2004
- ------- --------- ---------- ---------- ---------- ----------

PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the year)
Net asset value, beginning of year ............... $ 30.50 $ 28.28 $ 23.42 $ 18.53 $ 14.95
---------- ---------- ---------- ---------- ----------
Income from investment operations(a):
Net investment income(b) ...................... 0.29 0.55 0.36 0.28 0.18
Net realized and unrealized gains (losses) .... (16.42) 7.14 6.20 4.90 3.66
---------- ---------- ---------- ---------- ----------
Total from investment operations ................. (16.13) 7.69 6.56 5.18 3.84
---------- ---------- ---------- ---------- ----------
Less distributions from:
Net investment income ......................... (0.60) (0.84) (0.53) (0.29) (0.26)
Net realized gains ............................ (0.89) (4.63) (1.17) -- --
---------- ---------- ---------- ---------- ----------
Total distributions .............................. (1.49) (5.47) (1.70) (0.29) (0.26)
---------- ---------- ---------- ---------- ----------
Redemption fees(c, d)............................. -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Net asset value, end of year ..................... $ 12.88 $ 30.50 $ 28.28 $ 23.42 $ 18.53
========== ========== ========== ========== ==========
Total return(e) .................................. (53.91)% 28.77% 28.29% 28.20% 25.45%
RATIOS TO AVERAGE NET ASSETS
Expenses(f) ...................................... 1.87% 1.83% 1.86% 1.97% 2.03%
Net investment income ............................ 1.22% 1.74% 1.39% 1.36% 1.12%
SUPPLEMENTAL DATA
Net assets, end of year (000's) .................. $1,491,693 $4,647,893 $4,876,035 $3,395,151 $2,305,376
Portfolio turnover rate .......................... 66.61% 92.26%(g) 51.95% 34.76% 58.74%

(a) The amount shown for a share outstanding throughout the period may not
correlate with the Statement of Operations for the period due to the timing
of sales and repurchases of the Fund shares in relation to income earned
and/or fluctuating market value of the investments of the Fund.

(b) Based on average daily shares outstanding.

(d) Amount rounds to less than $0.01 per share.

(e) Total return does not reflect sales commissions or contingent deferred
sales charges, if applicable.

(f) Benefit of expense reduction rounds to less than 0.01%.

(g) Excludes the value of portfolio securities delivered as a result of a
redemption in-kind. See Note 12.

The accompanying notes are an integral part of these financial statements.

Annual Report | 15

Templeton Developing Markets Trust

FINANCIAL HIGHLIGHTS (CONTINUED)

YEAR ENDED DECEMBER 31,
---------------------------------------------------
CLASS B 2008 2007 2006 2005 2004
- ------- ------- ------- ------- ------- -------

PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the year)
Net asset value, beginning of year ............... $ 29.85 $ 27.78 $ 23.03 $ 18.24 $ 14.74
------- ------- ------- ------- -------
Income from investment operations(a):
Net investment income(b) ...................... 0.11 0.30 0.17 0.15 0.06
Net realized and unrealized gains (losses) .... (16.01) 7.00 6.08 4.80 3.61
------- ------- ------- ------- -------
Total from investment operations ................. (15.90) 7.30 6.25 4.95 3.67
------- ------- ------- ------- -------
Less distributions from:
Net investment income ......................... (0.39) (0.60) (0.33) (0.16) (0.17)
Net realized gains ............................ (0.89) (4.63) (1.17) -- --
------- ------- ------- ------- -------
Total distributions .............................. (1.28) (5.23) (1.50) (0.16) (0.17)
------- ------- ------- ------- -------
Redemption fees(c, d) ............................ -- -- -- -- --
------- ------- ------- ------- -------
Net asset value, end of year ..................... $ 12.67 $ 29.85 $ 27.78 $ 23.03 $ 18.24
======= ======= ======= ======= =======
Total return(e) .................................. (54.26)% 27.82% 27.40% 27.35% 24.70%
RATIOS TO AVERAGE NET ASSETS
Expenses(f) ...................................... 2.61% 2.55% 2.58% 2.62% 2.68%
Net investment income ............................ 0.48% 1.02% 0.67% 0.71% 0.47%
SUPPLEMENTAL DATA
Net assets, end of year (000's) .................. $15,987 $53,396 $54,991 $46,965 $36,992
Portfolio turnover rate .......................... 66.61% 92.26%(g) 51.95% 34.76% 58.74%

(b) Based on average daily shares outstanding.

(d) Amount rounds to less than $0.01 per share.

(e) Total return does not reflect sales commissions or contingent deferred
sales charges, if applicable.

(f) Benefit of expense reduction rounds to less than 0.01%.

(g) Excludes the value of portfolio securities delivered as a result of a
redemption in-kind. See Note 12.

The accompanying notes are an integral part of these financial statements.

16 | Annual Report

Templeton Developing Markets Trust

FINANCIAL HIGHLIGHTS (CONTINUED)

YEAR ENDED DECEMBER 31,
--------------------------------------------------------
CLASS C 2008 2007 2006 2005 2004
- ------- -------- -------- -------- -------- --------

PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the year)
Net asset value, beginning of year ............... $ 29.76 $ 27.72 $ 23.00 $ 18.22 $ 14.72
-------- -------- -------- -------- --------
Income from investment operations(a):
Net investment income(b) ...................... 0.11 0.29 0.17 0.14 0.05
Net realized and unrealized gains (losses) .... (15.96) 7.00 6.07 4.81 3.60
-------- -------- -------- -------- --------
Total from investment operations ................. (15.85) 7.29 6.24 4.95 3.65
-------- -------- -------- -------- --------
Less distributions from:
Net investment income ......................... (0.41) (0.62) (0.35) (0.17) (0.15)
Net realized gains ............................ (0.89) (4.63) (1.17) -- --
-------- -------- -------- -------- --------
Total distributions .............................. (1.30) (5.25) (1.52) (0.17) (0.15)
-------- -------- -------- -------- --------
Redemption fees(c, d) ............................ -- -- -- -- --
-------- -------- -------- -------- --------
Net asset value, end of year ..................... $ 12.61 $ 29.76 $ 27.72 $ 23.00 $ 18.22
======== ======== ======== ======== ========
Total return(e) .................................. (54.27)% 27.87% 27.38% 27.31% 24.72%
RATIOS TO AVERAGE NET ASSETS
Expenses(f) ...................................... 2.60% 2.55% 2.58% 2.63% 2.69%
Net investment income ............................ 0.49% 1.02% 0.67% 0.70% 0.46%
SUPPLEMENTAL DATA
Net assets, end of year (000's) .................. $200,454 $578,419 $489,722 $364,355 $258,365
Portfolio turnover rate .......................... 66.61% 92.26%(g) 51.95% 34.76% 58.74%

(b) Based on average daily shares outstanding.

(d) Amount rounds to less than $0.01 per share.

(e) Total return does not reflect sales commissions or contingent deferred
sales charges, if applicable.

(f) Benefit of expense reduction rounds to less than 0.01%.

(g) Excludes the value of portfolio securities delivered as a result of a
redemption in-kind. See Note 12.

The accompanying notes are an integral part of these financial statements.

Annual Report | 17

Templeton Developing Markets Trust

FINANCIAL HIGHLIGHTS (CONTINUED)

YEAR ENDED DECEMBER 31,
---------------------------------------------------
CLASS R 2008 2007 2006 2005 2004
- ------- ------- ------- ------- ------- ------

PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the year)
Net asset value, beginning of year ............... $ 30.07 $ 27.96 $ 23.20 $ 18.39 $14.85
------- ------- ------- ------- ------
Income from investment operations(a):
Net investment income(b) ...................... 0.23 0.44 0.29 0.20 0.16
Net realized and unrealized gains (losses) .... (16.17) 7.09 6.14 4.90 3.64
------- ------- ------- ------- ------
Total from investment operations ................. (15.94) 7.53 6.43 5.10 3.80
------- ------- ------- ------- ------
Less distributions from:
Net investment income ......................... (0.55) (0.79) (0.50) (0.29) (0.26)
Net realized gains ............................ (0.89) (4.63) (1.17) -- --
------- ------- ------- ------- ------
Total distributions .............................. (1.44) (5.42) (1.67) (0.29) (0.26)
------- ------- ------- ------- ------
Redemption fees(c, d) ............................ -- -- -- -- --
------- ------- ------- ------- ------
Net asset value, end of year ..................... $ 12.69 $ 30.07 $ 27.96 $ 23.20 $18.39
======= ======= ======= ======= ======
Total return(e) .................................. (54.03)% 28.53% 27.99% 28.03% 25.28%
RATIOS TO AVERAGE NET ASSETS
Expenses(f) ...................................... 2.11% 2.06% 2.08% 2.13% 2.18%
Net investment income ............................ 0.98% 1.51% 1.17% 1.20% 0.97%
SUPPLEMENTAL DATA
Net assets, end of year (000's) .................. $30,147 $68,502 $40,779 $16,183 $5,220
Portfolio turnover rate .......................... 66.61% 92.26%(g) 51.95% 34.76% 58.74%

(b) Based on average daily shares outstanding.

(d) Amount rounds to less than $0.01 per share.

(e) Total return does not reflect sales commissions or contingent deferred
sales charges, if applicable.

(f) Benefit of expense reduction rounds to less than 0.01%.

(g) Excludes the value of portfolio securities delivered as a result of a
redemption in-kind. See Note 12.

The accompanying notes are an integral part of these financial statements.

18 | Annual Report

Templeton Developing Markets Trust

FINANCIAL HIGHLIGHTS (CONTINUED)

YEAR ENDED DECEMBER 31,
-------------------------------------------------------
ADVISOR CLASS 2008 2007 2006 2005 2004
- ------------- ------- -------- -------- -------- --------

PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the year)
Net asset value, beginning of year ............... $ 30.48 $ 28.27 $ 23.40 $ 18.51 $ 14.93
------- -------- -------- -------- --------
Income from investment operations(a):
Net investment income(b) ...................... 0.32 0.62 0.43 0.32 0.24
Net realized and unrealized gains (losses) .... (16.40) 7.16 6.22 4.92 3.65
------- -------- -------- -------- --------
Total from investment operations ................. (16.08) 7.78 6.65 5.24 3.89
------- -------- -------- -------- --------
Less distributions from:
Net investment income ......................... (0.67) (0.94) (0.61) (0.35) (0.31)
Net realized gains ............................ (0.89) (4.63) (1.17) -- --
------- -------- -------- -------- --------
Total distributions .............................. (1.56) (5.57) (1.78) (0.35) (0.31)
------- -------- -------- -------- --------
Redemption fees(c, d) ............................ -- -- -- -- --
------- -------- -------- -------- --------
Net asset value, end of year ..................... $ 12.84 $ 30.48 $ 28.27 $ 23.40 $ 18.51
======= ======== ======== ======== ========
Total return ..................................... (53.79)% 29.12% 28.63% 28.63% 25.98%
RATIOS TO AVERAGE NET ASSETS
Expenses(e) ...................................... 1.61% 1.56% 1.58% 1.63% 1.68%
Net investment income ............................ 1.48% 2.01% 1.67% 1.70% 1.47%
SUPPLEMENTAL DATA
Net assets, end of year (000's) .................. $93,590 $793,791 $460,225 $343,823 $199,101
Portfolio turnover rate .......................... 66.61% 92.26%(f) 51.95% 34.76% 58.74%

(b) Based on average daily shares outstanding.

(d) Amount rounds to less than $0.01 per share.

(e) Benefit of expense reduction rounds to less than 0.01%.

(f) Excludes the value of portfolio securities delivered as a result of a
redemption in-kind. See Note 12.

The accompanying notes are an integral part of these financial statements.

Annual Report | 19

Templeton Developing Markets Trust

STATEMENT OF INVESTMENTS, DECEMBER 31, 2008

INDUSTRY SHARES VALUE
-------------------------------------------- -------------- --------------

COMMON STOCKS 92.2%
ARGENTINA 0.3%
Tenaris SA, ADR ............................ Energy Equipment & Services 282,600 $ 5,928,948
--------------
AUSTRIA 0.6%
OMV AG ..................................... Oil, Gas & Consumable Fuels 449,754 11,772,840
--------------
BRAZIL 6.0%
AES Tiete SA ............................... Independent Power Producers & Energy Traders 2,390,210 13,208,376
American Banknote SA ....................... Commercial Services & Supplies 335,726 1,559,324
Banco Itau Holding Financeira SA, ADR ...... Commercial Banks 1,774,418 20,583,249
Companhia de Bebidas das Americas
(AmBev) ................................. Beverages 732,140 26,821,409
Companhia Energetica de Minas Gerais ....... Electric Utilities 339,741 3,677,042
Natura Cosmeticos SA ....................... Personal Products 2,548,246 20,907,838
Souza Cruz SA .............................. Tobacco 1,522,899 29,017,000
--------------
115,774,238
--------------
CHILE 1.1%
Banco Santander Chile SA, ADR .............. Commercial Banks 161,600 5,660,849
Cia Cervecerias Unidas SA, ADR ............. Beverages 378,600 9,900,390
Empresa Nacional de Telecomunicaciones
SA ...................................... Diversified Telecommunication Services 287,883 3,130,840
Lan Airlines SA, ADR ....................... Airlines 394,648 3,176,916
--------------
21,868,995
--------------
CHINA 22.8%
Aluminum Corp. of China Ltd., H ............ Metals & Mining 25,118,675 13,223,426
Anta Sports Products Ltd. .................. Textiles, Apparel & Luxury Goods 2,052,000 934,629
Bank of China Ltd., H ...................... Commercial Banks 74,713,000 20,437,093
China Coal Energy Co., H ................... Oil, Gas & Consumable Fuels 24,493,000 19,499,085
China Construction Bank Corp., H ........... Commercial Banks 82,730,000 45,366,894
China Life Insurance Co. Ltd., H ........... Insurance 7,027,000 21,352,462
China Mobile Ltd. .......................... Wireless Telecommunication Services 11,236,500 112,797,050
China Molybdenum Co. Ltd., H ............... Metals & Mining 13,476,000 6,120,554
China Petroleum and Chemical Corp., H ...... Oil, Gas & Consumable Fuels 11,950,710 7,231,921
China Shenhua Energy Co. Ltd., H ........... Oil, Gas & Consumable Fuels 10,432,500 22,075,946
China Shipping Development Co. Ltd., H ..... Marine 5,938,000 5,899,538
CNOOC Ltd. ................................. Oil, Gas & Consumable Fuels 23,718,307 22,156,918
Denway Motors Ltd. ......................... Automobiles 49,628,521 15,432,471
Hidili Industry International Development
Ltd. .................................... Metals & Mining 20,977,000 6,604,201
Industrial and Commercial Bank of China
Ltd., H ................................. Commercial Banks 90,697,000 47,746,350
Lonking Holdings Ltd. ...................... Machinery 2,801,000 1,434,798
PetroChina Co. Ltd., H ..................... Oil, Gas & Consumable Fuels 49,114,902 43,029,881
(a) Shanda Interactive Entertainment Ltd.,
ADR ..................................... Software 95,300 3,083,908
Shanghai Industrial Holdings Ltd. .......... Industrial Conglomerates 1,154,136 2,635,830
Tencent Holdings Ltd. ...................... Internet Software & Services 904,400 5,834,688

20 | Annual Report

Templeton Developing Markets Trust

STATEMENT OF INVESTMENTS, DECEMBER 31, 2008 (CONTINUED)

INDUSTRY SHARES VALUE
-------------------------------------------- -------------- --------------

COMMON STOCKS (CONTINUED)
CHINA (CONTINUED)
Yantai Changyu Pioneer Wine Co. Ltd., B .... Beverages 620,000 $ 2,175,944
Zijin Mining Group Co. Ltd., H ............. Metals & Mining 24,916,000 15,109,958
--------------
440,183,545
--------------
EGYPT 0.3%
Egyptian Financial Group-Hermes Holding .... Capital Markets 576,744 1,801,001
Telecom Egypt .............................. Diversified Telecommunication Services 1,237,802 3,593,528
--------------
5,394,529
--------------
HONG KONG 1.3%
Dairy Farm International Holdings Ltd. ..... Food & Staples Retailing 4,159,262 17,760,049
VTech Holdings Ltd. ........................ Communications Equipment 1,891,000 8,002,993
--------------
25,763,042
--------------
HUNGARY 1.9%
Magyar Telekom PLC ......................... Diversified Telecommunication Services 2,679,644 7,574,118
MOL Hungarian Oil and Gas Nyrt. ............ Oil, Gas & Consumable Fuels 377,035 19,587,523
(a) OTP Bank Ltd. .............................. Commercial Banks 682,164 10,323,033
--------------
37,484,674
--------------
INDIA 4.0%
(a) Bharti Airtel Ltd. ......................... Wireless Telecommunication Services 231,006 3,397,622
GAIL India Ltd. ............................ Gas Utilities 4,037,796 17,107,897
Grasim Industries Ltd. ..................... Construction Materials 20,037 501,935
Great Eastern Shipping Co. Ltd. ............ Oil, Gas & Consumable Fuels 203,800 850,494
Infosys Technologies Ltd. .................. IT Services 414,255 9,524,372
National Aluminium Co. Ltd. ................ Metals & Mining 1,283,378 5,011,298
Oil & Natural Gas Corp. Ltd. ............... Oil, Gas & Consumable Fuels 1,374,989 18,881,353
Shipping Corp. of India Ltd. ............... Marine 152,630 249,570
Steel Authority of India Ltd. .............. Metals & Mining 4,238,764 6,752,206
Tata Consultancy Services Ltd. ............. IT Services 1,481,336 14,566,572
Union Bank of India Ltd. ................... Commercial Banks 118,000 395,599
--------------
77,238,918
--------------
INDONESIA 1.6%
PT Astra International Tbk ................. Automobiles 7,791,000 7,540,830
PT Bank Central Asia Tbk ................... Commercial Banks 30,513,500 9,098,062
PT Telekomunikasi Indonesia, B ............. Diversified Telecommunication Services 23,465,000 14,853,991
--------------
31,492,883
--------------
ISRAEL 0.5%
(a) Taro Pharmaceutical Industries Ltd. ........ Pharmaceuticals 1,380,656 10,631,051
--------------
KENYA 0.0%(b)
East African Breweries Ltd. ................ Beverages 268,000 493,504
--------------

Annual Report | 21

Templeton Developing Markets Trust

STATEMENT OF INVESTMENTS, DECEMBER 31, 2008 (CONTINUED)

INDUSTRY SHARES VALUE
-------------------------------------------- -------------- --------------

COMMON STOCKS (CONTINUED)
KUWAIT 0.3%
Kuwait Projects Co. (Holding) KSC
(KIPCO) ................................. Diversified Financial Services 975,000 $ 1,729,475
National Mobile Telecommunications Co. ..... Wireless Telecommunication Services 515,000 3,504,923
--------------
5,234,398
--------------
LUXEMBOURG 0.1%
(a) Reinet Investments SCA, GDR ................ Textiles, Apparel & Luxury Goods 1,391,346 1,435,751
--------------
MALAYSIA 0.1%
British American Tobacco Malaysia Bhd ...... Tobacco 162,200 2,090,630
--------------
MEXICO 9.2%
Alfa SAB de CV ............................. Industrial Conglomerates 429,972 924,840
America Movil SAB de CV, L, ADR ............ Wireless Telecommunication Services 1,495,870 46,357,011
Fomento Economico Mexicano SAB de CV,
ADR ..................................... Beverages 158,700 4,781,631
Grupo Televisa SA .......................... Media 11,894,154 35,469,989
Kimberly Clark de Mexico SAB de CV, A ...... Household Products 11,128,490 37,324,866
Telefonos de Mexico SAB de CV, (TELMEX)
L, ADR .................................. Diversified Telecommunication Services 1,611,340 33,741,460
Wal-Mart de Mexico SAB de CV, V ............ Food & Staples Retailing 6,996,963 18,876,240
--------------
177,476,037
--------------
OMAN 0.1%
Oman International Bank .................... Commercial Banks 2,165,510 1,237,402
--------------
PAKISTAN 1.2%
Fauji Fertilizer Co. Ltd. .................. Chemicals 1,470,688 1,104,062
MCB Bank Ltd. .............................. Commercial Banks 5,655,912 8,992,989
Oil & Gas Development Co. Ltd. ............. Oil, Gas & Consumable Fuels 8,830,000 5,578,663
(a) Pakistan Telecommunications Corp., A ....... Diversified Telecommunication Services 34,246,719 7,310,295
--------------
22,986,009
--------------
PERU 0.2%
Credicorp Ltd. ............................. Commercial Banks 67,700 3,382,292
--------------
PHILIPPINES 1.0%
Bank of the Philippine Islands ............. Commercial Banks 840,200 703,095
Globe Telecom Inc. ......................... Wireless Telecommunication Services 59,237 967,487
Philippine Long Distance Telephone Co.,
ADR ..................................... Wireless Telecommunication Services 373,670 17,543,806
--------------
19,214,388
--------------
POLAND 0.3%
Polski Koncern Naftowy Orlen SA ............ Oil, Gas & Consumable Fuels 774,866 6,721,156
--------------
QATAR 1.1%
Industries Qatar ........................... Industrial Conglomerates 163,040 4,507,998
Qatar National Bank ........................ Commercial Banks 374,296 17,481,535
--------------
21,989,533
--------------
RUSSIA 6.4%
Bank of Moscow ............................. Commercial Banks 69,175 1,487,263
(a, c) Centenergoholding .......................... Electric Utilities 300,651 --

22 | Annual Report

Templeton Developing Markets Trust

STATEMENT OF INVESTMENTS, DECEMBER 31, 2008 (CONTINUED)

INDUSTRY SHARES VALUE
------------------------------------------- -------------- --------------

COMMON STOCKS (CONTINUED)
RUSSIA (CONTINUED)
(a) Federal Grid Co. ........................... Electric Utilities 478,699,888 $ 2,034,475
Gazprom, ADR ............................... Oil, Gas & Consumable Fuels 1,399,600 19,944,300
Gazprom, ADR (London Exchange) ............. Oil, Gas & Consumable Fuels 1,150,836 16,318,854
(a) Holiding MRSK OAO .......................... Electric Utilities 50,018,700 1,550,580
(a) Inter Rao Ues OAO .......................... Electric Utilities 2,069,000,309 465,525
(a, c) Intergenerasiya Holding Co. ................ Electric Utilities 1,007,974 --
(a) Kuzbassenergo .............................. Electric Utilities 24,832,726 62,082
LUKOIL, ADR ................................ Oil, Gas & Consumable Fuels 392,779 13,000,985
LUKOIL, ADR (London Exchange) .............. Oil, Gas & Consumable Fuels 394,248 12,548,914
Mining and Metallurgical Co. Norilsk
Nickel .................................. Metals & Mining 286,428 18,761,034
Mobile TeleSystems ......................... Wireless Telecommunication Services 1,048,800 4,016,904
Mobile TeleSystems, ADR .................... Wireless Telecommunication Services 294,500 7,857,260
(a) RAO Energy System of East OAO .............. Electric Utilities 48,018,700 103,240
Sberbank RF ................................ Commercial Banks 12,379,730 9,161,000
(a, c) Sibenergyholding JSC ....................... Electric Utilities 276,935 --
(a) TGK-2 ...................................... Electric Utilities 646,869,284 177,889
(a) TGK-4 ...................................... Electric Utilities 790,494,253 355,722
TNK-BP ..................................... Oil, Gas & Consumable Fuels 20,839,920 13,545,948
(a) Wimm-Bill-Dann Foods ....................... Food Products 185,300 2,408,900
--------------
123,800,875
--------------
SINGAPORE 0.8%
ComfortDelGro Corp. Ltd. ................... Road & Rail 3,098,586 3,136,440
Fraser and Neave Ltd. ...................... Industrial Conglomerates 4,675,617 9,628,670
Keppel Corp. Ltd. .......................... Industrial Conglomerates 986,520 2,981,942
--------------
15,747,052
--------------
SOUTH AFRICA 10.9%
ABSA Group Ltd. ............................ Commercial Banks 975,000 11,217,686
Foschini Ltd. .............................. Specialty Retail 5,054,904 25,812,276
Impala Platinum Holdings Ltd. .............. Metals & Mining 541,013 7,769,868
Lewis Group Ltd. ........................... Specialty Retail 3,713,157 18,960,802
Massmart Holdings Ltd. ..................... Food & Staples Retailing 785,660 7,067,597
MTN Group Ltd. ............................. Wireless Telecommunication Services 2,439,194 28,154,526
Naspers Ltd., N ............................ Media 1,077,806 19,062,260
Pretoria Portland Cement Co. Ltd. .......... Construction Materials 866,780 2,890,803
Remgro Ltd. ................................ Diversified Financial Services 2,184,297 17,762,517
Sasol ...................................... Oil, Gas & Consumable Fuels 399,146 11,890,305
The Spar Group Ltd. ........................ Food & Staples Retailing 721,582 4,375,550
Standard Bank Group Ltd. ................... Commercial Banks 2,999,688 26,486,607
Kersaf Investments Ltd. .................... Hotels, Restaurants & Leisure 44,020 437,156
Telkom South Africa Ltd. ................... Diversified Telecommunication Services 1,048,440 12,770,891
Tiger Brands Ltd. .......................... Food Products 785,476 11,986,030
Truworths International Ltd. ............... Specialty Retail 1,163,164 4,219,563
--------------
210,864,437
--------------

Annual Report | 23

Templeton Developing Markets Trust

STATEMENT OF INVESTMENTS, DECEMBER 31, 2008 (CONTINUED)

INDUSTRY SHARES VALUE
------------------------------------------- -------------- --------------

COMMON STOCKS (CONTINUED)
SOUTH KOREA 2.0%
Kangwon Land Inc. .......................... Hotels, Restaurants & Leisure 1,717,664 $ 18,563,827
S1 Corp. ................................... Commercial Services & Supplies 104,886 4,484,437
SK Telecom Co. Ltd. ........................ Wireless Telecommunication Services 89,489 14,808,552
-------------
37,856,816
--------------
SWEDEN 1.0%
Oriflame Cosmetics SA, SDR ................. Personal Products 661,514 19,078,067
--------------
TAIWAN 5.6%
MediaTek Inc. .............................. Semiconductors & Semiconductor Equipment 3,183,580 21,418,135
President Chain Store Corp. ................ Food & Staples Retailing 15,319,164 36,644,469
Taiwan Mobile Co. Ltd. ..................... Wireless Telecommunication Services 8,021,000 11,918,313
Taiwan Semiconductor Manufacturing Co.
Ltd. .................................... Semiconductors & Semiconductor Equipment 27,748,229 37,590,278
--------------
107,571,195
--------------
THAILAND 1.3%
Siam Cement Public Co. Ltd., fgn. .......... Construction Materials 1,280,389 4,012,143
Thai Beverages Co. Ltd., fgn. .............. Beverages 157,351,598 21,419,589
--------------
25,431,732
--------------
TURKEY 5.5%
Akbank TAS ................................. Commercial Banks 8,644,664 26,823,430
Anadolu Efes Biracilik Ve Malt Sanayii
AS ...................................... Beverages 1,715,290 11,468,671
Tekfen Holding AS .......................... Diversified Financial Services 212,500 402,791
Tupras-Turkiye Petrol Rafinerileri AS ...... Oil, Gas & Consumable Fuels 3,131,570 32,931,798
Turkcell Iletisim Hizmetleri AS ............ Wireless Telecommunication Services 5,949,519 33,793,113
--------------
105,419,803
--------------
UNITED ARAB EMIRATES 0.3%
First Gulf Bank ............................ Commercial Banks 1,126,132 2,765,395
National Bank of Abu Dhabi ................. Commercial Banks 232,662 566,904
Union National Bank ........................ Commercial Banks 4,303,004 2,600,675
--------------
5,932,974
--------------
UNITED KINGDOM 4.4%
Anglo American PLC ......................... Metals & Mining 1,331,088 29,877,261
British American Tobacco PLC ............... Tobacco 886,942 23,141,638
HSBC Holdings PLC .......................... Commercial Banks 3,323,988 31,609,238
--------------
84,628,137
--------------
TOTAL COMMON STOCKS
(COST $2,178,382,819) ................... 1,782,125,851
--------------
DIRECT EQUITY INVESTMENTS
(COST $4,447,586) 0.3%
HONG KONG 0.3%
(a,d,e,f) Mayfair Hanoi, Ltd., 37.5% equity owned
through HEA Holdings Ltd., a wholly
owned investment ........................ Real Estate Management & Development -- 6,182,235
--------------

24 | Annual Report

Templeton Developing Markets Trust

STATEMENT OF INVESTMENTS, DECEMBER 31, 2008 (CONTINUED)

INDUSTRY SHARES VALUE
------------------------------------------- -------------- --------------

PREFERRED STOCKS 8.0%
BRAZIL 7.2%
Banco Bradesco SA, ADR, pfd. ............... Commercial Banks 2,059,941 $ 20,331,618
Companhia Energetica de Minas Gerais,
ADR, pfd. ............................... Electric Utilities 818,150 11,241,381
Companhia Vale do Rio Doce, ADR,
pfd., A ................................. Metals & Mining 3,691,161 39,310,865
Itausa - Investimentos Itau SA, pfd. ....... Commercial Banks 3,954,434 13,685,468
Petroleo Brasileiro SA, ADR, pfd. .......... Oil, Gas & Consumable Fuels 1,887,540 38,524,691
Unibanco - Uniao de Bancos Brasileiros
SA, GDR, pfd. ........................... Commercial Banks 166,736 10,774,480
Usinas Siderurgicas de Minas Gerais SA,
pfd., A ................................. Metals & Mining 459,757 5,267,987
--------------
139,136,490
--------------
CHILE 0.8%
Embotelladora Andina SA, pfd., A ........... Beverages 6,257,918 11,525,163
Sociedad Quimica y Minera de Chile SA,
B, ADR, pfd. ............................ Chemicals 130,855 3,191,553
--------------
14,716,716
--------------
TOTAL PREFERRED STOCKS
(COST $111,599,402) .................... 153,853,206
--------------
TOTAL INVESTMENTS BEFORE SHORT TERM
INVESTMENTS
(COST $2,294,429,807) ................... 1,942,161,292
--------------
SHORT TERM INVESTMENTS
(COST $13,130) 0.0%(b)
MONEY MARKET FUNDS 0.0%(b)
UNITED STATES 0.0%(b)
(g) Franklin Institutional Fiduciary Trust Money
Market Portfolio, 0.55% ................. 13,130 13,130
--------------
TOTAL INVESTMENTS
(COST $2,294,442,937) 100.5% ............ 1,942,174,422
OTHER ASSETS, LESS LIABILITIES (0.5)% ...... (10,303,568)
--------------
NET ASSETS 100.0% .......................... $1,931,870,854
==============

See Abbreviations on page 40.

(a) Non-income producing for the twelve months ended December 31, 2008.

(b) Rounds to less than 0.1% of net assets.

(c) Security has been deemed illiquid because it may not be able to be sold
within seven days. At December 31, 2008, the value of these securities was
$0.

(d) See Note 9 regarding restricted securities.

(e) See Note 10 regarding holdings of 5% voting securities.

(f) See Note 11 regarding other considerations - security board member.

(g) See Note 7 regarding investments in the Franklin Institutional Fiduciary
Trust Money Market Portfolio. The rate shown is the annualized seven-day
yield at period end.

The accompanying notes are an integral part of these financial statements.

Annual Report | 25

Templeton Developing Markets Trust

FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
December 31, 2008

Assets:
Investments in securities:
Cost - Unaffiliated issuers ....................... $ 2,289,982,221
Cost - Controlled affiliated issuers (Note 10) .... 4,447,586
Cost - Sweep Money Fund (Note 7) .................. 13,130
----------------
Total cost of investments ......................... $ 2,294,442,937
================
Value - Unaffiliated issuers ...................... $ 1,935,979,057
Value - Controlled affiliated issuers (Note 10) ... 6,182,235
Value - Sweep Money Fund (Note 7) ................. 13,130
----------------
Total value of investments ........................ 1,942,174,422
Foreign currency, at value (cost $37,469) ............ 37,317
Receivables:
Investment securities sold ........................ 11,253,570
Capital shares sold ............................... 2,647,886
Dividends ......................................... 8,270,543
Foreign tax ....................................... 901,960
----------------
Total assets ................................... 1,965,285,698
----------------
Liabilities:
Payables:
Investment securities purchased ................... 90,810
Capital shares redeemed ........................... 22,746,254
Affiliates ........................................ 3,533,425
Funds advanced by custodian .......................... 4,617,215
Accrued expenses and other liabilities ............... 2,427,140
----------------
Total liabilities .............................. 33,414,844
----------------
Net assets, at value ........................ $ 1,931,870,854
----------------
Net assets consist of:
Paid-in capital ...................................... $ 2,798,337,619
Distributions in excess of net investment income ..... (32,126,960)
Net unrealized appreciation (depreciation) ........... (352,398,633)
Accumulated net realized gain (loss) ................. (481,941,172)
----------------
Net assets, at value ........................ $ 1,931,870,854
================

The accompanying notes are an integral part of these financial statements.

26 | Annual Report

Templeton Developing Markets Trust

FINANCIAL STATEMENTS (CONTINUED)

STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
December 31, 2008

CLASS A:
Net assets, at value ................................. $ 1,491,692,978
---------------
Shares outstanding ................................... 115,846,571
---------------
Net asset value per share(a) ......................... $ 12.88
---------------
Maximum offering price per share (net asset value per
share / 94.25%) ................................... $ 13.67
---------------
CLASS B:
Net assets, at value ................................. $ 15,986,552
---------------
Shares outstanding ................................... 1,261,795
---------------
Net asset value and maximum offering price per
share(a) .......................................... $ 12.67
---------------
CLASS C:
Net assets, at value ................................. $ 200,454,046
---------------
Shares outstanding ................................... 15,892,823
---------------
Net asset value and maximum offering price per
share(a) ............................................. $ 12.61
---------------
CLASS R:
Net assets, at value ................................. $ 30,147,387
---------------
Shares outstanding ................................... 2,375,790
---------------
Net asset value and maximum offering price per
share ................................................ $ 12.69
---------------
ADVISOR CLASS:
Net assets, at value ................................. $ 193,589,891
---------------
Shares outstanding ................................... 15,079,856
---------------
Net asset value and maximum offering price per
share ................................................ $ 12.84
---------------

(a) Redemption price is equal to net asset value less contingent deferred
sales charges, if applicable.

The accompanying notes are an integral part of these financial statements.

Annual Report | 27

Templeton Developing Markets Trust

FINANCIAL STATEMENTS (CONTINUED)

STATEMENT OF OPERATIONS
for the year ended December 31, 2008

Investment income:
Dividends: (net of foreign taxes of $12,009,249)
Unaffiliated issuers .............................. $ 120,309,785
Sweep Money Fund (Note 7) ......................... 1,406,181
Interest (net of foreign taxes of $2,170) ............ 1,527,827
---------------
Total investment income ........................ 123,243,793
---------------
Expenses:
Management fees (Note 3a) ............................ 48,121,153
Administrative fees (Note 3b) ........................ 3,569,216
Distribution fees: (Note 3c)
Class A ........................................... 8,015,995
Class B ........................................... 341,806
Class C ........................................... 3,999,093
Class R ........................................... 269,698
Transfer agent fees (Note 3e) ........................ 7,309,805
Custodian fees (Note 4) .............................. 3,988,326
Reports to shareholders .............................. 573,917
Registration and filing fees ......................... 220,353
Professional fees .................................... 232,541
Trustees' fees and expenses .......................... 194,135
Other ................................................ 123,631
---------------
Total expenses ................................. 76,959,669
Expense reductions (Not 4) ..................... (71,194)
---------------
Net expenses ................................ 76,888,475
---------------
Net investment income .................... 46,355,318
---------------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments (net of foreign taxes of $148,471) .... (347,387,367)
Foreign currency transactions ..................... (4,096,296)
---------------
Net realized gain (loss) .................... (351,483,663)
---------------
Net change in unrealized appreciation (depreciation)
on:
Investments ....................................... (2,505,637,001)
Translation of other assets and liabilities
denominated in foreign currencies ................. (187,169)
Change in deferred taxes on unrealized appreciation
(depreciation) .................................... 2,341,302
---------------
Net change in unrealized appreciation
(depreciation) ........................... (2,503,482,868)
---------------
Net realized and unrealized gain (loss) ................. (2,854,966,531)
---------------
Net increase (decrease) in net assets resulting from
operations ........................................... $(2,808,611,213)
===============

The accompanying notes are an integral part of these financial statements.

28 | Annual Report

Templeton Developing Markets Trust

FINANCIAL STATEMENTS (CONTINUED)

STATEMENTS OF CHANGES IN NET ASSETS

YEAR ENDED DECEMBER 31,
--------------------------------
2008 2007
--------------- --------------

Increase (decrease) in net assets:
Operations:
Net investment income ............................. $ 46,355,318 $ 103,968,198
Net realized gain (loss) from investments, swap
contracts, and foreign currency transactions ... (351,483,663) 1,011,822,768
Net change in unrealized appreciation (depreciation)
on investments, translation of other assets and
liabilities denominated in foreign currencies,
and deferred taxes ............................. (2,503,482,868) 355,140,870
--------------- --------------
Net increase (decrease) in net assets resulting
from operations ............................. (2,808,611,213) 1,470,931,836
--------------- --------------
Distributions to shareholders from:
Net investment income:
Class A ........................................ (68,005,557) (119,782,375)
Class B ........................................ (498,387) (1,019,709)
Class C ........................................ (6,497,298) (10,672,975)
Class R ........................................ (1,255,850) (1,463,391)
Advisor Class .................................. (10,235,209) (20,739,845)
Net realized gains:
Class A ........................................ (111,274,827) (629,506,866)
Class B ........................................ (1,220,304) (7,441,868)
Class C ........................................ (15,205,505) (78,249,563)
Class R ........................................ (2,097,185) (8,852,009)
Advisor Class .................................. (13,584,100) (104,138,795)
--------------- --------------
Total distributions to shareholders .................. (229,874,222) (981,867,396)
--------------- --------------
Capital share transactions: (Note 2)
Class A ........................................ (818,508,474) (622,200,255)
Class B ........................................ (11,829,237) (6,130,838)
Class C ........................................ (69,312,600) 49,112,499
Class R ........................................ 2,905,635 24,082,343
Advisor Class .................................. (274,951,817) 286,241,307
--------------- --------------
Total capital share transactions ..................... (1,171,696,493) (268,894,944)
--------------- --------------
Redemption fees ...................................... 51,127 80,457
--------------- --------------
Net increase (decrease) in net assets ....... (4,210,130,801) 220,249,953
Net assets:
Beginning of year .................................... 6,142,001,655 5,921,751,702
--------------- --------------
End of year .......................................... $ 1,931,870,854 $6,142,001,655
=============== ==============
Distributions in excess of net investment income included
in net assets:
End of year .......................................... $ (32,126,960) $ (46,986,131)
=============== ==============

The accompanying notes are an integral part of these financial statements.

Annual Report | 29

Templeton Developing Markets Trust

NOTES TO FINANCIAL STATEMENTS

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Templeton Developing Markets Trust (Fund) is registered under the Investment
Company Act of 1940, as amended, (1940 Act) as an open-end investment company.
The Fund offers five classes of shares: Class A, Class B, Class C, Class R, and
Advisor Class. Each class of shares differs by its initial sales load,
contingent deferred sales charges, distribution fees, voting rights on matters
affecting a single class and its exchange privilege.

The following summarizes the Fund's significant accounting policies.

A. SECURITY VALUATION

Securities listed on a securities exchange or on the NASDAQ National Market
System are valued at the last quoted sale price or the official closing price of
the day, respectively. Over-the-counter securities and listed securities for
which there is no reported sale are valued within the range of the most recent
quoted bid and ask prices. Securities that trade in multiple markets or on
multiple exchanges are valued according to the broadest and most representative
market. Investments in open-end mutual funds are valued at the closing net asset
value.

Foreign securities are valued as of the close of trading on the foreign stock
exchange on which the security is primarily traded, or the NYSE, whichever is
earlier. If no sale is reported at that time, the foreign security will be
valued within the range of the most recent quoted bid and ask prices. The value
is then converted into its U.S. dollar equivalent at the foreign exchange rate
in effect at the close of the NYSE on the day that the value of the foreign
security is determined.

The Fund has procedures to determine the fair value of individual securities and
other assets for which market prices are not readily available or which may not
be reliably priced. Methods for valuing these securities may include:
fundamental analysis, matrix pricing, discounts from market prices of similar
securities, or discounts applied due to the nature and duration of restrictions
on the disposition of the securities. Due to the inherent uncertainty of
valuations of such securities, the fair values may differ significantly from the
values that would have been used had a ready market for such investments
existed. Occasionally, events occur between the time at which trading in a
security is completed and the close of the NYSE that might call into question
the availability (including the reliability) of the value of a portfolio
security held by the Fund. The investment manager monitors price movements
following the close of trading in foreign stock markets through a series of
country specific market proxies (such as baskets of American Depository
Receipts, futures contracts and exchange traded funds). These price movements
are measured against established trigger thresholds for each specific market
proxy to assist in determining if an event has occurred. If such an event
occurs, the securities may be valued using fair value procedures, which may
include the use of independent pricing services. At December 31, 2008, a portion
of the securities held by the Fund were fair valued. All security valuation
procedures are approved by the Fund's Board of Trustees.

30 | Annual Report

Templeton Developing Markets Trust

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

B. FOREIGN CURRENCY TRANSLATION

Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the exchange rate of such
currencies against U.S. dollars on the date of valuation. Purchases and sales of
securities, income and expense items denominated in foreign currencies are
translated into U.S. dollars at the exchange rate in effect on the transaction
date. Occasionally, events may impact the availability or reliability of foreign
exchange rates used to convert the U.S. dollar equivalent value. If such an
event occurs, the foreign exchange rate will be valued at fair value using
procedures established and approved by the Fund's Board of Trustees.

The Fund does not separately report the effect of changes in foreign exchange
rates from changes in market prices on securities held. Such changes are
included in net realized and unrealized gain or loss from investments on the
Statement of Operations.

Realized foreign exchange gains or losses arise from sales of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on securities transactions and the difference between the recorded amounts
of dividends, interest, and foreign withholding taxes and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in foreign exchange rates on
foreign denominated assets and liabilities other than investments in securities
held at the end of the reporting period.

C. FOREIGN CURRENCY CONTRACTS

When the Fund purchases or sells foreign securities it may enter into foreign
exchange contracts to minimize foreign exchange risk from the trade date to the
settlement date of the transactions. A foreign exchange contract is an agreement
between two parties to exchange different currencies at an agreed upon exchange
rate at a future date. Realized and unrealized gains and losses on these
contracts are included in the Statement of Operations.

The risks of these contracts include movement in the values of the foreign
currencies relative to the U.S. dollar and the possible inability of the
counterparties to fulfill their obligations under the contracts, which may be in
excess of the amount reflected in the Statement of Assets and Liabilities.

D. INCOME AND DEFERRED TAXES

No provision has been made for U.S. income taxes because it is the Fund's policy
to qualify as a regulated investment company under the Internal Revenue Code and
to distribute to shareholders substantially all of its taxable income and net
realized gains.

The Fund has reviewed the tax positions, taken on federal income tax returns,
for each of the three open tax years and as of December 31, 2008, and has
determined that no provision for income tax is required in the Fund's financial
statements.

Annual Report | 31

Templeton Developing Markets Trust

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

D. INCOME AND DEFERRED TAXES (CONTINUED)

Foreign securities held by the Fund may be subject to foreign taxation on
dividend and interest income received. Foreign taxes, if any, are recorded based
on the tax regulations and rates that exist in the foreign markets in which the
Fund invests.

The Fund may be subject to a tax imposed on net realized gains on securities of
certain foreign countries. The Fund records an estimated deferred tax liability
for net unrealized gains on these securities in an amount that would be payable
if the securities were disposed of on the valuation date.

E. SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS

Security transactions are accounted for on trade date. Realized gains and losses
on security transactions are determined on a specific identification basis.
Interest income and estimated expenses are accrued daily. Dividend income is
recorded on the ex-dividend date except that certain dividends from foreign
securities are recognized as soon as the Fund is notified of the ex-dividend
date. Distributions to shareholders are recorded on the ex-dividend date and are
determined according to income tax regulations (tax basis). Distributable
earnings determined on a tax basis may differ from earnings recorded in
accordance with accounting principles generally accepted in the United States of
America. These differences may be permanent or temporary. Permanent differences
are reclassified among capital accounts to reflect their tax character. These
reclassifications have no impact on net assets or the results of operations.
Temporary differences are not reclassified, as they may reverse in subsequent
periods.

Realized and unrealized gains and losses and net investment income, not
including class specific expenses, are allocated daily to each class of shares
based upon the relative proportion of net assets of each class. Differences in
per share distributions, by class, are generally due to differences in class
specific expenses.

F. ACCOUNTING ESTIMATES

The preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the amounts of income
and expenses during the reporting period. Actual results could differ from those
estimates.

G. REDEMPTION FEES

A short term trading redemption fee was imposed, with some exceptions, on any
fund shares that were redeemed or exchanged within seven calendar days following
their purchase date. The redemption fee was 2% of the amount redeemed. Such fees
were retained by the fund and accounted for as an addition to paid-in capital.
Effective September 1, 2008, the redemption fee was eliminated.

32 | Annual Report

Templeton Developing Markets Trust

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

H. GUARANTEES AND INDEMNIFICATIONS

Under the Fund's organizational documents, its officers and trustees are
indemnified by the Fund against certain liabilities arising out of the
performance of their duties to the Fund. Additionally, in the normal course of
business, the Fund enters into contracts with service providers that contain
general indemnification clauses. The Fund's maximum exposure under these
arrangements is unknown as this would involve future claims that may be made
against the Fund that have not yet occurred. Currently, the Fund expects the
risk of loss to be remote.

2. SHARES OF BENEFICIAL INTEREST

At December 31, 2008, there were an unlimited number of shares authorized
(without par value). Transactions in the Fund's shares were as follows:

YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
2008 2007
----------------------------- ------------------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------------- ------------ ---------------

CLASS A SHARES:
Shares sold ................. 23,404,228 $ 543,215,981 37,285,682 $ 1,162,545,150
Shares issued in reinvestment
of distributions ......... 9,023,640 153,032,031 22,920,149 657,330,261
Shares redeemed in-kind
(Note 12) ................ -- -- (11,489,267) (339,622,741)
Shares redeemed ............. (68,966,036) (1,514,756,486) (68,737,250) (2,102,452,925)
----------- --------------- ------------ ---------------
Net increase (decrease) ..... (36,538,168) $ (818,508,474) (20,020,686) $ (622,200,255)
=========== =============== ============ ===============
CLASS B SHARES:
Shares sold ................. 97,728 $ 2,292,162 159,201 $ 5,149,716
Shares issued in reinvestment
of distributions ......... 91,600 1,568,804 274,966 7,720,298
Shares redeemed ............. (716,582) (15,690,203) (624,932) (19,000,852)
----------- --------------- ------------ ---------------
Net increase (decrease) ..... (527,254) $ (11,829,237) (190,765) $ (6,130,838)
=========== =============== ============ ===============
CLASS C SHARES:
Shares sold ................. 1,967,099 $ 43,072,369 3,103,553 $ 93,927,906
Shares issued in reinvestment
of distributions ......... 1,068,378 18,152,048 2,597,066 72,815,274
Shares redeemed ............. (6,581,570) (130,537,017) (3,927,109) (117,630,681)
----------- --------------- ------------ ---------------
Net increase (decrease) ..... (3,546,093) $ (69,312,600) 1,773,510 $ 49,112,499
=========== =============== ============ ===============
CLASS R SHARES:
Shares sold ................. 1,384,913 $ 31,904,673 1,366,811 $ 42,058,022
Shares issued in reinvestment
of distributions ......... 188,877 3,127,566 346,329 9,826,080

Shares redeemed ............. (1,476,425) (32,126,604) (893,078) (27,801,759)
----------- --------------- ------------ ---------------
Net increase (decrease) ..... 97,365 $ 2,905,635 820,062 $ 24,082,343
=========== =============== ============ ===============

Annual Report | 33

Templeton Developing Markets Trust

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

2. SHARES OF BENEFICIAL INTEREST (CONTINUED)

YEAR ENDED DECEMBER 31,
--------------------------------------------------------
2008 2007
--------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ---------- -------------

ADVISOR CLASS SHARES:
Shares sold ................. 5,332,978 $ 111,511,547 13,704,826 $ 412,287,369
Shares issued in reinvestment
of distributions ......... 1,206,141 19,765,836 2,426,800 69,817,046
Shares redeemed ............. (17,504,369) (406,229,200) (6,367,684) (195,863,108)
----------- ------------- ---------- -------------
Net increase (decrease) ..... (10,965,250) $(274,951,817) 9,763,942 $ 286,241,307
=========== ============= ========== ============

3. TRANSACTIONS WITH AFFILIATES

Franklin Resources, Inc. is the holding company for various subsidiaries that
together are referred to as Franklin Templeton Investments. Certain officers and
trustees of the Fund are also officers and/or directors of the following
subsidiaries:

SUBSIDIARY AFFILIATION
- ---------- ----------------------

Templeton Asset Management Ltd. (TAML) Investment manager
Franklin Templeton Services, LLC (FT Services) Administrative manager
Franklin Templeton Distributors, Inc. (Distributors) Principal underwriter
Franklin Templeton Investor Services, LLC (Investor Services) Transfer agent

A. MANAGEMENT FEES

Effective March 31, 2008, the Fund pays an investment management fee to TAML
based on the average daily net assets of the Fund as follows:

ANNUALIZED FEE RATE NET ASSETS
- ------------------- --------------------------------------------------

1.250% Up to and including $1 billion
1.200% Over $1 billion, up to and including $5 billion
1.150% Over $5 billion, up to and including $7.5 billion
1.125% Over $7.5 billion, up to and including $10 billion
1.100% Over $10 billion, up to and including $15 billion
1.050% Over $15 billion, up to and including $20 billion
1.000% In excess of $20 billion

Prior to March 31, 2008, the Fund paid fees to TAML based on the average daily
net assets of the Fund as follows:

ANNUALIZED FEE RATE NET ASSETS
- ------------------- --------------------------------------------------

1.250% Up to and including $1 billion
1.200% Over $1 billion, up to and including $5 billion
1.150% Over $5 billion, up to and including $10 billion
1.100% Over $10 billion, up to and including $15 billion
1.050% Over $15 billion, up to and including $20 billion
1.000% In excess of $20 billion

34 | Annual Report

Templeton Developing Markets Trust

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

3. TRANSACTIONS WITH AFFILIATES (CONTINUED)

B. ADMINISTRATIVE FEES

The Fund pays an administrative fee to FT Services based on the Fund's average
daily net assets as follows:

ANNUALIZED FEE RATE NET ASSETS
- ------------------- ---------------------------------------------------

0.150% Up to and including $200 million
0.135% Over $200 million, up to and including $700 million
0.100% Over $700 million, up to and including $1.2 billion
0.075% In excess of $1.2 billion

C. DISTRIBUTION FEES

The Fund's Board of Trustees has adopted distribution plans for each share
class, with the exception of Advisor Class shares, pursuant to Rule 12b-1 under
the 1940 Act. Under the Fund's Class A reimbursement distribution plan, the Fund
reimburses Distributors for costs incurred in connection with the servicing,
sale and distribution of the Fund's shares up to the maximum annual plan rate.
Under the Class A reimbursement distribution plan, costs exceeding the maximum
for the current plan year cannot be reimbursed in subsequent periods.

In addition, under the Fund's Class B, C, and R compensation distribution plans,
the Fund pays Distributors for costs incurred in connection with the servicing,
sale and distribution of the Fund's shares up to the maximum annual plan rate
for each class.

The maximum annual plan rates, based on the average daily net assets, for each
class, are as follows:

Class A ... 0.35%
Class B ... 1.00%
Class C ... 1.00%
Class R ... 0.50%

The Board of Trustees has set the current rate at 0.30% per year for Class A
shares until further notice and approval by the Board.

D. SALES CHARGES/UNDERWRITING AGREEMENTS

Distributors has advised the Fund of the following commission transactions
related to the sales and redemptions of the Fund's shares for the year:

Sales charges retained net of commissions paid to
unaffiliated broker/dealers .................. $284,267
Contingent deferred sales charges retained ...... $146,673

E. TRANSFER AGENT FEES

For the year ended December 31, 2008, the Fund paid transfer agent fees of
$7,309,805, of which $4,109,553 was retained by Investor Services.

Annual Report | 35

Templeton Developing Markets Trust

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

4. EXPENSE OFFSET ARRANGEMENT

The Fund has entered into an arrangement with its custodian whereby credits
realized as a result of uninvested cash balances are used to reduce a portion of
the Fund's custodian expenses. During the year ended December 31, 2008, the
custodian fees were reduced as noted in the Statement of Operations.

5. INCOME TAXES

For tax purposes, capital losses may be carried over to offset future capital
gains, if any. At December 31, 2008, the Fund had no tax basis capital losses.
During the year ended December 31, 2008, the Fund utilized $1,902,640 of capital
loss carryforwards.

For tax purposes, realized capital losses and realized currency losses occurring
subsequent to October 31, may be deferred and treated as occurring on the first
day of the following fiscal year. At December 31, 2008, the Fund deferred
realized capital losses and realized currency losses of $455,363,806 and
$94,854, respectively.

The tax character of distributions paid during the years ended December 31, 2008
and 2007, was as follows:

2008 2007
------------ ------------

Distributions paid from:
Ordinary income ......... $119,676,929 $206,278,621
Long term capital gain .. 110,197,293 775,588,775
------------ ------------
$229,874,222 $981,867,396
============ ============

At December 31, 2008, the cost of investments, net unrealized appreciation
(depreciation), undistributed ordinary income and undistributed long term
capital gains for income tax purposes were as follows:

Cost of investments .......................... $2,355,694,773
==============
Unrealized appreciation ...................... $ 222,082,084
Unrealized depreciation ...................... (635,602,435)
--------------
Net unrealized appreciation (depreciation) ... $ (413,520,351)
==============
Undistributed ordinary income ................ $ 2,351,467
Undistributed long term capital gains ........ 839,557
--------------
Distributable earnings ....................... $ 3,191,024
==============

Net investment income differs for financial statement and tax purposes primarily
due to differing treatments of foreign currency transactions, passive foreign
investment company shares, and foreign capital gains tax.

36 | Annual Report

Templeton Developing Markets Trust

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

5. INCOME TAXES (CONTINUED)

Net realized gains (losses) differ for financial statement and tax purposes
primarily due to differing treatments of wash sales, foreign currency
transactions, passive foreign investment company shares, and foreign capital
gains tax.

The Fund utilized a tax accounting practice to treat a portion of the proceeds
from capital shares redeemed as a distribution from realized capital gains.

6. INVESTMENT TRANSACTIONS

Purchases and sales of investments (excluding short term securities) for the
year ended December 31, 2008, aggregated $2,593,229,364 and $3,836,633,742,
respectively.

7. INVESTMENTS IN FRANKLIN INSTITUTIONAL FIDUCIARY TRUST MONEY MARKET PORTFOLIO

The Fund may invest in the Franklin Institutional Fiduciary Trust Money Market
Portfolio (Sweep Money Fund), an open-end investment company managed by Franklin
Advisers, Inc. (an affiliate of the investment manager). Management fees paid by
the Fund are reduced on assets invested in the Sweep Money Fund, in an amount
not to exceed the management and administrative fees paid by the Sweep Money
Fund.

8. CONCENTRATION OF RISK

Investing in foreign securities may include certain risks and considerations not
typically associated with investing in U.S. securities, such as fluctuating
currency values and changing local and regional economic, political and social
conditions, which may result in greater market volatility. In addition, certain
foreign securities may not be as liquid as U.S. securities.

9. RESTRICTED SECURITIES

The Fund may invest in securities that are restricted under the Securities Act
of 1933 (1933 Act) or which are subject to legal, contractual, or other agreed
upon restrictions on resale. Restricted securities are often purchased in
private placement transactions, and cannot be sold without prior registration
unless the sale is pursuant to an exemption under the 1933 Act. Disposal of
these securities may require greater effort and expense, and prompt sale at an
acceptable price may be difficult. The Fund may have registration rights for
restricted securities. The issuer generally incurs all registration costs.

Annual Report | 37

Templeton Developing Markets Trust

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

9. RESTRICTED SECURITIES (CONTINUED)

At December 31, 2008, the Fund held investments in restricted securities,
excluding 144A securities deemed to be liquid, valued in accordance with
procedures approved by the Fund's Board of Trustees as reflecting fair value, as
follows:

ACQUISITION
SHARES ISSUER DATE COST VALUE
- ------ ------------------------------------------------------ ----------- ---------- ----------

-- Mayfair Hanoi, Ltd., 37.5% equity owned through
HEA Holdings, Ltd.
TOTAL RESTRICTED SECURITIES (0.32% of Net Assets).. 10/31/96 $4,447,586 $6,182,235
----------

10. HOLDINGS OF 5% VOTING SECURITIES OF PORTFOLIO COMPANIES

The 1940 Act defines "affiliated companies" to include investments in portfolio
companies in which a fund owns 5% or more of the outstanding voting securities.
Investments in "affiliated companies" for the Fund for the year ended December
31, 2008, were as shown below.

NUMBER OF SHARES NUMBER OF SHARES VALUE AT REALIZED
HELD AT BEGINNING GROSS GROSS HELD AT END END OF INVESTMENT CAPITAL
NAME OF ISSUER OF YEAR ADDITIONS REDUCTIONS OF YEAR YEAR INCOME GAIN (LOSS)
- --------------------------- ----------------- --------- ---------- ---------------- ---------- ---------- ----------

CONTROLLED AFFILIATES(a)
Mayfair Hanoi, Ltd., 37.5%
equity owned through
HEA Holdings, Ltd....... -- -- -- -- $6,182,235 $ -- $ --
---------- ---------- ----------
TOTAL AFFILIATED
SECURITIES (0.32% of
Net Assets)

(a) Issuer in which the Fund owns 25% or more of the outstanding voting
securities.

11. OTHER CONSIDERATIONS

Officers, directors or employees of the Fund's Investment Manager, may serve
from time to time as members of boards of directors of companies in which the
Fund invests. Such participation may result in the possession by the Investment
Manager of material non-public information which, pursuant to the Fund's
policies and the requirements of applicable securities laws, could prevent the
Fund from trading in the securities of such companies for limited or extended
periods of time.

12. REDEMPTION IN-KIND

During the year ended December 31, 2007, the Fund realized $111,257,407 of net
gains resulting from a redemption in-kind in which a shareholder redeemed fund
shares for securities held by the Fund rather than for cash. Because such gains
are not taxable to the Fund, and are not distributed to remaining shareholders,
they have been reclassified from accumulated net realized gains to paid-in
capital.

38 | Annual Report

Templeton Developing Markets Trust

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

13. FAIR VALUE MEASUREMENTS

The Fund adopted Financial Accounting Standards Board (FASB) Statement No. 157,
"Fair Value Measurement" (SFAS 157), on January 1, 2008. SFAS 157 defines fair
value, establishes a framework for measuring fair value, and expands disclosures
about fair value measurements. The Fund has determined that the implementation
of SFAS 157 did not have a material impact on the Fund's financial statements.

SFAS 157 establishes a fair value hierarchy that distinguishes between market
data obtained from independent sources (observable inputs) and the Fund's own
market assumptions (unobservable inputs). These inputs are used in determining
the value of the Fund's investments and are summarized in the following fair
value hierarchy:

- - Level 1 - quoted prices in active markets for identical securities

- - Level 2 - other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speed, credit risk, etc.)

- - Level 3 - significant unobservable inputs (including the Fund's own
assumptions in determining the fair value of investments)

The inputs or methodology used for valuing securities are not an indication of
the risk associated with investing in those securities.

The following is a summary of the inputs used as of December 31, 2008, in
valuing the Fund's assets carried at fair value:

LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
-------------- ---------- ---------- --------------

ASSETS:
Investments in Securities .. $1,934,321,605 $1,670,582 $6,182,235 $1,942,174,422

At December 31, 2008, the reconciliation of assets in which significant
unobservable inputs (Level 3) were used in determining fair value, is as
follows:

INVESTMENTS
IN SECURITIES
-------------

Beginning Balance - January 1, 2008 ...................... $5,507,295
Net realized gain (loss) .............................. --
Net change in unrealized appreciation (depreciation) .. 674,940
Net purchases (sales) ................................. --
Transfers in and/or out of Level 3 .................... --
----------
Ending Balance ........................................... $6,182,235
==========
Net change in unrealized appreciation (depreciation)
attributable to assets still held at end of year ...... $ 674,940
==========

Annual Report | 39

Templeton Developing Markets Trust

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

14. NEW ACCOUNTING PRONOUNCEMENT

In March 2008, FASB issued FASB Statement No. 161, "Disclosures about Derivative
Instruments and Hedging Activities, an amendment of FASB Statement No. 133"
(SFAS 161), which expands disclosures about derivative investments and hedging
activities. SFAS 161 is effective for fiscal years and interim periods beginning
after November 15, 2008. The Fund is currently evaluating the impact, if any, of
applying the various provisions of SFAS 161.

15. SUBSEQUENT EVENT

On January 23, 2009, the Fund entered into, along with certain other funds
managed by Franklin Templeton Investments (individually, "Borrower";
collectively "Borrowers"), a $725 million senior unsecured syndicated global
line of credit (Global Credit Facility) to provide a source of funds to the
Borrowers for temporary and emergency purposes and to meet future unanticipated
or unusually large redemption requests.

Under the terms of the Global Credit Facility, each Borrower has agreed to pay
its proportionate share of fees and expenses incurred in connection with the
implementation and maintenance of the Global Credit Facility.

ABBREVIATIONS

SELECTED PORTFOLIO

ADR - American Depository Receipt

GDR - Global Depository Receipt

SDR - Swedish Depository Receipt

40 | Annual Report

Templeton Developing Markets Trust

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF TEMPLETON DEVELOPING MARKETS TRUST

In our opinion, the accompanying statement of assets and liabilities, including
the statement of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Templeton Developing Markets Trust
(the "Fund") at December 31, 2008, the results of its operations for the year
then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the five years in the
period then ended, in conformity with accounting principles generally accepted
in the United States of America. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at December 31, 2008 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California
February 20, 2009

Annual Report | 41

Templeton Developing Markets Trust

TAX DESIGNATION (UNAUDITED)

Under Section 852(b)(3)(C) of the Internal Revenue Code (Code), the Fund
designates the maximum amount allowable but no less than $126,983,018 as a long
term capital gain dividend for the fiscal year ended December 31, 2008.

Under Section 871(k)(2)(C) of the Code, the Fund designates the maximum amount
allowable but no less than $33,184,166 as a short term capital gain dividend for
purposes of the tax imposed under Section 871(a)(1)(A) of the Code for the
fiscal year ended December 31, 2008.

Under Section 854(b)(2) of the Code, the Fund designates the maximum amount
allowable but no less than $136,135,327 as qualified dividends for purposes of
the maximum rate under Section 1(h)(11) of the Code for the fiscal year ended
December 31, 2008. Distributions, including qualified dividend income, paid
during calendar year 2008 will be reported to shareholders on Form 1099-DIV in
January 2009. Shareholders are advised to check with their tax advisors for
information on the treatment of these amounts on their individual income tax
returns.

Under Section 871(k)(1)(C) of the Code, the Fund designates the maximum amount
allowable but no less than $1,573,977 as interest related dividends for purposes
of the tax imposed under Section 871(a)(1)(A) of the Code for the fiscal year
ended December 31, 2008.

At December 31, 2008, more than 50% of the Fund's total assets were invested in
securities of foreign issuers. In most instances, foreign taxes were withheld
from income paid to the Fund on these investments. As shown in the table below,
the Fund designates to shareholders the foreign source income and foreign taxes
paid, pursuant to Section 853 of the Code. This designation will allow
shareholders of record on December 16, 2008, to treat their proportionate share
of foreign taxes paid by the Fund as having been paid directly by them. The
shareholder shall consider these amounts as foreign taxes paid in the tax year
in which they receive the Fund distribution.

The following table provides a detailed analysis of foreign tax paid, foreign
source income, and foreign qualified dividends as designated by the Fund, to
Class A, Class B, Class C, Class R, and Advisor Class shareholders of record.

Record Date: 12/16/2008

FOREIGN TAX PAID FOREIGN SOURCE INCOME FOREIGN QUALIFIED DIVIDENDS
CLASS PER SHARE PER SHARE PER SHARE
- ----- ---------------- --------------------- ---------------------------

Class A $0.0811 $0.9877 $0.6139
Class B $0.0811 $0.7865 $0.4890
Class C $0.0811 $0.8035 $0.4993
Class R $0.0811 $0.9414 $0.5853
Advisor Class $0.0811 $1.0581 $0.6577

42 | Annual Report

Templeton Developing Markets Trust

TAX DESIGNATION (UNAUDITED) (CONTINUED)

Foreign Tax Paid Per Share (Column 1) is the amount per share available to you,
as a tax credit (assuming you held your shares in the Fund for a minimum of 16
days during the 31-day period beginning 15 days before the ex-dividend date of
the Fund's distribution to which the foreign taxes relate), or, as a tax
deduction.

Foreign Source Income Per Share (Column 2) is the amount per share of income
dividends paid to you that is attributable to foreign securities held by the
Fund, plus any foreign taxes withheld on these dividends. The amounts reported
include foreign source qualified dividends that have not been adjusted for the
rate differential applicable to such dividend income.(1)

Foreign Qualified Dividends Per Share (Column 3) is the amount per share of
foreign source qualified dividends the Fund paid to you, plus any foreign taxes
withheld on these dividends. These amounts represent the portion of the Foreign
Source Income reported to you in column 2 that were derived from qualified
foreign securities held by the Fund.(1)

In January 2009, shareholders will receive Form 1099-DIV which will include
their share of taxes paid and foreign source income distributed during the
calendar year 2008. The Foreign Source Income reported on Form 1099-DIV has not
been adjusted for the rate differential on foreign source qualified dividend
income. Shareholders are advised to check with their tax advisors for
information on the treatment of these amounts on their 2008 individual income
tax returns.

(1) Qualified dividends are taxed at a maximum rate of 15% (5% for those in the
10% and 15% income tax bracket). In determining the amount of foreign tax
credit that may be applied against the U.S. tax liability of individuals
receiving foreign source qualified dividends, adjustments may be required
to the foreign tax credit limitation calculation to reflect the rate
differential applicable to such dividend income. The rules however permit
certain individuals to elect not to apply the rate differential adjustments
for capital gains and/or dividends for any taxable year. Please consult
your tax advisor and the instructions to Form 1116 for more information.

Annual Report | 43

Templeton Developing Markets Trust

BOARD MEMBERS AND OFFICERS

The name, year of birth and address of the officers and board members, as well
as their affiliations, positions held with the Trust, principal occupations
during the past five years and number of U.S. registered portfolios overseen in
the Franklin Templeton Investments fund complex are shown below. Generally, each
board member serves until that person's successor is elected and qualified.

INDEPENDENT BOARD MEMBERS

NUMBER OF PORTFOLIOS IN
NAME, YEAR OF BIRTH LENGTH OF FUND COMPLEX OVERSEEN
AND ADDRESS POSITION TIME SERVED BY BOARD MEMBER* OTHER DIRECTORSHIPS HELD
- ------------------------------ --------------- ------------------ ----------------------- --------------------------------

HARRIS J. ASHTON (1932) Trustee Since 1992 138 Bar-S Foods (meat packing
500 East Broward Blvd. company).
Suite 2100
Fort Lauderdale, FL 33394-3091

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:

Director of various companies; and FORMERLY, Director, RBC Holdings, Inc. (bank
holding company) (until 2002); and President, Chief Executive Officer and
Chairman of the Board, General Host Corporation (nursery and craft centers)
(until 1998).

ANN TORRE BATES (1958) Trustee Since 2008 30 SLM Corporation (Sallie Mae) and
500 East Broward Blvd. Allied Capital Corporation
Suite 2100 (financial services).
Fort Lauderdale, FL 33394-3091

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:

Independent strategic and financial consultant; and FORMERLY, Executive Vice
President and Chief Financial Officer, NHP Incorporated (manager of multifamily
housing) (1995-1997); and Vice President and Treasurer, US Airways, Inc. (until
1995).

FRANK J. CROTHERS (1944) Trustee Since 1991 23 Fortis, Inc. (utility holding
500 East Broward Blvd. company), Victory Nickel Inc.
Suite 2100 (mineral explo-ration) and
Fort Lauderdale, FL 33394-3091 ABACO Markets Limited (retail
distributors).

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:

Director and Vice Chairman, Caribbean Utilities Company Ltd. and director of
various other private business and nonprofit organizations.

EDITH E. HOLIDAY (1952) Lead Trustee since 138 Hess Corporation (exploration
500 East Broward Blvd. Independent 1996 and Lead and refining of oil and gas),
Suite 2100 Trustee Independent H.J. Heinz Company (processed
Fort Lauderdale, FL 33394-3091 Trustee since 2007 foods and allied products), RTI
International Metals, Inc.
(manufacture and distribution of
titanium), Canadian National
Railway (railroad) and White
Mountains Insurance Group, Ltd.
(holding company).

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:

Director or Trustee of various companies and trusts; and FORMERLY, Assistant to
the President of the United States and Secretary of the Cabinet (1990-1993);
General Counsel to the United States Treasury Department (1989-1990); and
Counselor to the Secretary and Assistant Secretary for Public Affairs and Public
Liaison-United States Treasury Department (1988-1989).

44 | Annual Report

DAVID W. NIEMIEC (1949) Trustee Since 2005 23 Emeritus Corporation (assisted
500 East Broward Blvd. living) and OSI Pharmaceuticals,
Suite 2100 Inc. (pharmaceutical products).
Fort Lauderdale, FL 33394-3091

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:

Advisor, Saratoga Partners (private equity fund); Director, various private
companies; and FORMERLY, Managing Director, Saratoga Partners (1998-2001) and
SBC Warburg Dillon Read (investment banking) (1997-1998); Vice Chairman, Dillon,
Read & Co. Inc. (investment banking) (1991-1997); and Chief Financial Officer,
Dillon, Read & Co. Inc. (1982-1997).

FRANK A. OLSON (1932) Trustee Since 2003 138 Hess Corporation (exploration
500 East Broward Blvd. and refining of oil and gas) and
Suite 2100 Sentient Jet (private jet
Fort Lauderdale, FL 33394-3091 service).

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:

Chairman Emeritus, The Hertz Corporation (car rental) (since 2000) (Chairman of
the Board (1980-2000) and Chief Executive Officer (1977-1999)); and FORMERLY,
Chairman of the Board, President and Chief Executive Officer, UAL Corporation
(airlines).

LARRY D. THOMPSON (1945) Trustee Since 2005 145 None
500 East Broward Blvd.
Suite 2100
Fort Lauderdale, FL 33394-3091

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:

Senior Vice President - Government Affairs, General Counsel and Secretary,
PepsiCo, Inc. (consumer products); and FORMERLY, Director, Delta Airlines
(aviation) (2003-2005) and Providian Financial Corp. (credit card provider)
(1997-2001); Senior Fellow of The Brookings Institution (2003-2004); Visiting
Professor, University of Georgia School of Law (2004); and Deputy Attorney
General, U.S. Department of Justice (2001-2003).

CONSTANTINE D. TSERETOPOULOS Trustee Since 1991 23 None
(1954)
500 East Broward Blvd.
Suite 2100
Fort Lauderdale, FL 33394-3091

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:

Physician, Lyford Cay Hospital (1987-present); director of various nonprofit
organizations; and FORMERLY, Cardiology Fellow, University of Maryland
(1985-1987) and Internal Medicine Resident, Greater Baltimore Medical Center
(1982-1985).

ROBERT E. WADE (1946) Trustee Since 2006 37 El Oro and Exploration Co.,
500 East Broward Blvd p.l.c. (investments).
Suite 2100
Fort Lauderdale, FL 33394-3091

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:

Retired, former practicing attorney.

Annual Report | 45

INTERESTED BOARD MEMBERS AND OFFICERS

**CHARLES B. JOHNSON (1933) Trustee, Trustee and 138 None
One Franklin Parkway Chairman of Chairman of the
San Mateo, CA 94403-1906 the Board and Board since 1995
Vice President and Vice President
since 1992

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:

Chairman of the Board, Member - Office of the Chairman and Director, Franklin
Resources, Inc.; Director, Templeton Worldwide, Inc.; and officer and/or
director or trustee, as the case may be, of some of the other subsidiaries of
Franklin Resources, Inc. and of 42 of the investment companies in Franklin
Templeton Investments.

**GREGORY E. JOHNSON (1961) Trustee Since 2007 92 None
One Franklin Parkway
San Mateo, CA 94403-1906

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:

Director, President and Chief Executive Officer, Franklin Resources, Inc.;
President, Templeton Worldwide, Inc.; Director, Templeton Asset Management Ltd.;
and officer and/or director or trustee, as the case may be, of some of the other
subsidiaries of Franklin Resources, Inc. and of 33 of the investment companies
in Franklin Templeton Investments.

JENNIFER J. BOLT (1964) Chief Executive Since Not Applicable Not Applicable
One Franklin Parkway Officer - December 2008
San Mateo, CA 94403-1906 Finance and
Administration

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:

Executive Vice President - Operations and Technology, Franklin Resources, Inc.;
Director, Templeton Global Advisors Limited; officer and/or director, as the
case may be, of some of the other subsidiaries of Franklin Resources, Inc. and
of 46 of the investment companies in Franklin Templeton Investments.

JAMES M. DAVIS (1952) Chief Chief Compliance Not Applicable Not Applicable
One Franklin Parkway Compliance Officer since 2004
San Mateo, CA 94403-1906 Officer and and Vice President
Vice President - AML Compliance
- AML since 2006
Compliance

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:

Director, Global Compliance, Franklin Resources, Inc.; officer of some of the
other subsidiaries of Franklin Resources, Inc. and of 46 of the investment
companies in Franklin Templeton Investments; and FORMERLY,Director of
Compliance, Franklin Resources, Inc. (1994-2001).

LAURA F. FERGERSON (1962) Chief Financial Since Not Applicable Not Applicable
One Franklin Parkway Officer and February 2008
San Mateo, CA 94403-1906 Chief
Accounting
Officer

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:

Vice President, Franklin Templeton Services, LLC; officer of 46 of the
investment companies in Franklin Templeton Investments; and FORMERLY, Director
and member of Audit and Valuation Committees, Runkel Funds, Inc. (2003-2004);
Assistant Treasurer of most of the investment companies in Franklin Templeton
Investments (1997-2003); and Vice President, Franklin Templeton Services, LLC
(1997-2003).

46 | Annual Report

JIMMY D. GAMBILL (1947) Vice President Since Not Applicable Not Applicable
500 East Broward Blvd. February 2008
Suite 2100
Fort Lauderdale, FL 33394-3091

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:

President, Franklin Templeton Services, LLC; Senior Vice President, Templeton
Worldwide, Inc.; and officer of some of the other subsidiaries of Franklin
Resources, Inc. and of 46 of the investment companies in Franklin Templeton
Investments.

DAVID P. GOSS (1947) Vice President Since 2000 Not Applicable Not Applicable
One Franklin Parkway
San Mateo, CA 94403-1906

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:

Senior Associate General Counsel, Franklin Templeton Investments; officer and/or
director, as the case may be, of some of the other subsidiaries of Franklin
Resources, Inc. and of 46 of the investment companies in Franklin Templeton
Investments.

RUPERT H. JOHNSON, JR. (1940) Vice President Since 1996 Not Applicable Not Applicable
One Franklin Parkway
San Mateo, CA 94403-1906

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:

Vice Chairman, Member - Office of the Chairman and Director, Franklin Resources,
Inc.; Director, Franklin Advisers, Inc. and Templeton Worldwide, Inc.; Senior
Vice President, Franklin Advisory Services, LLC; and officer and/or director or
trustee, as the case may be, of some of the other subsidiaries of Franklin
Resources, Inc. and of 44 of the investment companies in Franklin Templeton
Investments.

JOHN R. KAY (1940) Vice President Since 1994 Not Applicable Not Applicable
500 East Broward Blvd.
Suite 2100
Fort Lauderdale, FL 33394-3091

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:

Vice President, Templeton Worldwide, Inc.; Senior Vice President, Franklin
Templeton Services, LLC; and officer of some of the other subsidiaries of
Franklin Resources, Inc. and of 32 of the investment companies in Franklin
Templeton Investments; and FORMERLY, Vice President and Controller, Keystone
Group, Inc.

MARK MOBIUS (1936) President and President since Not Applicable Not Applicable
17th Floor, Chief Executive 1991 and Chief
The Chater House Officer - Executive Officer
8 Connaught Road Investment - Investment
Central, Hong Kong Management Management since
2002

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:

Portfolio Manager of various Templeton advisory affiliates; Managing Director,
Templeton Asset Management Ltd.; and officer and/or director, as the case may
be, of some of the other subsidiaries of Franklin Resources, Inc. and of six of
the investment companies in Franklin Templeton Investments; and FORMERLY,
President, International Investment Trust Company Limited (investment manager of
Taiwan R.O.C. Fund) (1986-1987); and Director, Vickers da Costa, Hong Kong
(1983-1986).

Annual Report | 47

ROBERT C. ROSSELOT (1960) Secretary Since 2004 Not Applicable Not Applicable
500 East Broward Blvd.
Suite 2100
Fort Lauderdale, FL 33394-3091

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:

Senior Associate General Counsel, Franklin Templeton Investments; Assistant
Secretary, Franklin Resources, Inc.; Vice President and Secretary, Templeton
Investment Counsel, LLC; Vice President, Secretary and Trust Officer, Fiduciary
Trust International of the South; and officer of 14 of the investment companies
in Franklin Templeton Investments.

GREGORY R. SEWARD (1956) Treasurer Since 2004 Not Applicable Not Applicable
500 East Broward Blvd.
Suite 2100
Fort Lauderdale, FL 33394-3091

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:

Vice President, Franklin Templeton Services, LLC; officer of 18 of the
investment companies in Franklin Templeton Investments; and FORMERLY, Vice
President, JPMorgan Chase (2000-2004) and American General Financial Group
(1991-2000).

CRAIG S. TYLE (1960) Vice President Since 2005 Not Applicable Not Applicable
One Franklin Parkway
San Mateo, CA 94403-1906

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:

General Counsel and Executive Vice President, Franklin Resources, Inc.; officer
of some of the other subsidiaries of Franklin Resources, Inc. and of 46 of the
investment companies in Franklin Templeton Investments; and FORMERLY, Partner,
Shearman & Sterling, LLP (2004-2005); and General Counsel, Investment Company
Institute (ICI) (1997-2004).

* We base the number of portfolios on each separate series of the U.S.
registered investment companies within the Franklin Templeton Investments
fund complex. These portfolios have a common investment manager or
affiliated investment managers.

** Charles B. Johnson is considered to be an interested person of the Fund
under the federal securities laws due to his position as officer and
director and major shareholder of Franklin Resources, Inc. (Resources),
which is the parent company of the Fund's investment manager and
distributor. Gregory E. Johnson is considered to be an interested person of
the Fund under the federal securities laws due to his position as an
officer and director of Resources.

Note 1: Charles B. Johnson and Rupert H. Johnson, Jr. are brothers and the
father and uncle, respectively, of Gregory E. Johnson and Jennifer J. Bolt.

Note 2: Officer information is current as of the date of this report. It is
possible that after this date, information about officers may change.

THE SARBANES-OXLEY ACT OF 2002 AND RULES ADOPTED BY THE U.S. SECURITIES AND
EXCHANGE COMMISSION REQUIRE THE FUND TO DISCLOSE WHETHER THE FUND'S AUDIT
COMMITTEE INCLUDES AT LEAST ONE MEMBER WHO IS AN AUDIT COMMITTEE FINANCIAL
EXPERT WITHIN THE MEANING OF SUCH ACT AND RULES. THE FUND'S BOARD HAS DETERMINED
THAT THERE IS AT LEAST ONE SUCH FINANCIAL EXPERT ON THE AUDIT COMMITTEE AND HAS
DESIGNATED EACH OF ANN TORRE BATES AND DAVID W. NIEMIEC AS AN AUDIT COMMITTEE
FINANCIAL EXPERT. THE BOARD BELIEVES THAT MS. BATES AND MR. NIEMIEC QUALIFY AS
SUCH AN EXPERT IN VIEW OF THEIR EXTENSIVE BUSINESS BACKGROUND AND EXPERIENCE.
MS. BATES HAS SERVED AS A MEMBER OF THE FUND AUDIT COMMITTEE SINCE JANUARY 2008.
SHE CURRENTLY SERVES AS A DIRECTOR OF SLM CORPORATION AND ALLIED CAPITAL
CORPORATION AND WAS FORMERLY THE EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL
OFFICER OF NHP INCORPORATED AND VICE PRESIDENT AND TREASURER OF US AIRWAYS, INC.
MR. NIEMIEC HAS SERVED AS A MEMBER OF THE FUND AUDIT COMMITTEE SINCE 2005,
CURRENTLY SERVES AS AN ADVISOR TO SARATOGA PARTNERS AND WAS FORMERLY ITS
MANAGING DIRECTOR FROM 1998 TO 2001. MR. NIEMIEC IS A DIRECTOR OF EMERITUS
CORPORATION AND OSI PHARMACEUTICALS, INC. AND VARIOUS PRIVATE COMPANIES, AND WAS
FORMERLY MANAGING DIRECTOR OF SBC WARBURG DILLON READ FROM 1997 TO 1998, AND WAS
VICE CHAIRMAN FROM 1991 TO 1997 AND CHIEF FINANCIAL OFFICER FROM 1982 TO 1997 OF
DILLON, READ & CO. INC. AS A RESULT OF SUCH BACKGROUND AND EXPERIENCE, THE BOARD
BELIEVES THAT MS. BATES AND MR. NIEMIEC HAVE EACH ACQUIRED AN UNDERSTANDING OF
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND FINANCIAL STATEMENTS, THE GENERAL
APPLICATION OF SUCH PRINCIPLES IN CONNECTION WITH THE ACCOUNTING ESTIMATES,
ACCRUALS AND RESERVES, AND ANALYZING AND EVALUATING FINANCIAL STATEMENTS THAT
PRESENT A BREADTH AND LEVEL OF COMPLEXITY OF ACCOUNTING ISSUES GENERALLY
COMPARABLE TO THOSE OF THE FUND, AS WELL AS AN UNDERSTANDING OF INTERNAL
CONTROLS AND PROCEDURES FOR FINANCIAL REPORTING AND AN UNDERSTANDING OF AUDIT
COMMITTEE FUNCTIONS. MS. BATES AND MR. NIEMIEC ARE INDEPENDENT BOARD MEMBERS AS
THAT TERM IS DEFINED UNDER THE APPLICABLE U.S. SECURITIES AND EXCHANGE
COMMISSION RULES AND RELEASES.

THE STATEMENT OF ADDITIONAL INFORMATION (SAI) INCLUDES ADDITIONAL INFORMATION
ABOUT THE BOARD MEMBERS AND IS AVAILABLE, WITHOUT CHARGE, UPON REQUEST.
SHAREHOLDERS MAY CALL (800) DIAL BEN/(800) 342-5236 TO REQUEST THE SAI.

48 | Annual Report

Templeton Developing Markets Trust

SHAREHOLDER INFORMATION

PROXY VOTING POLICIES AND PROCEDURES

The Trust's investment manager has established Proxy Voting Policies and
Procedures (Policies) that the Trust uses to determine how to vote proxies
relating to portfolio securities. Shareholders may view the Trust's complete
Policies online at franklintempleton.com. Alternatively, shareholders may
request copies of the Policies free of charge by calling the Proxy Group collect
at (954) 527-7678 or by sending a written request to: Franklin Templeton
Companies, LLC, 500 East Broward Boulevard, Suite 1500, Fort Lauderdale, FL
33394, Attention: Proxy Group. Copies of the Trust's proxy voting records are
also made available online at franklintempleton.com and posted on the U.S.
Securities and Exchange Commission's website at sec.gov and reflect the most
recent 12-month period ended June 30.

QUARTERLY STATEMENT OF INVESTMENTS

The Trust files a complete statement of investments with the U.S. Securities and
Exchange Commission for the first and third quarters for each fiscal year on
Form N-Q. Shareholders may view the filed Form N-Q by visiting the Commission's
website at sec.gov. The filed form may also be viewed and copied at the
Commission's Public Reference Room in Washington, DC. Information regarding the
operations of the Public Reference Room may be obtained by calling (800)
SEC-0330.

Annual Report | 49

This page intentionally left blank.

Literature Request

LITERATURE REQUEST. TO RECEIVE A BROCHURE AND PROSPECTUS, PLEASE CALL US AT
(800) DIAL BEN/(800) 342-5236 OR VISIT franklintempleton.com. INVESTORS SHOULD
CAREFULLY CONSIDER A FUND'S INVESTMENT GOALS, RISKS, CHARGES AND EXPENSES BEFORE
INVESTING. THE PROSPECTUS CONTAINS THIS AND OTHER INFORMATION. PLEASE CAREFULLY
READ THE PROSPECTUS BEFORE INVESTING. TO ENSURE THE HIGHEST QUALITY OF SERVICE,
WE MAY MONITOR, RECORD AND ACCESS TELEPHONE CALLS TO OR FROM OUR SERVICE
DEPARTMENTS. THESE CALLS CAN BE IDENTIFIED BY THE PRESENCE OF A REGULAR BEEPING
TONE.

FRANKLIN TEMPLETON FUNDS

VALUE
Franklin All Cap Value Fund
Franklin Balance Sheet Investment Fund
Franklin Large Cap Value Fund
Franklin MicroCap Value Fund(1)
Franklin MidCap Value Fund
Franklin Small Cap Value Fund
Mutual Beacon Fund
Mutual Qualified Fund
Mutual Recovery Fund(2)
Mutual Shares Fund

BLEND
Franklin Focused Core Equity Fund
Franklin Large Cap Equity Fund
Franklin Rising Dividends Fund

GROWTH
Franklin Capital Growth Fund(1)
Franklin Flex Cap Growth Fund
Franklin Growth Fund
Franklin Growth Opportunities Fund(3)
Franklin Small Cap Growth Fund(4)
Franklin Small-Mid Cap Growth Fund

SECTOR
Franklin Biotechnology Discovery Fund
Franklin DynaTech Fund
Franklin Global Real Estate Fund
Franklin Gold and Precious Metals Fund
Franklin Natural Resources Fund
Franklin Real Estate Securities Fund
Franklin Utilities Fund
Mutual Financial Services Fund

GLOBAL
Mutual Discovery Fund
Templeton Global Long-Short Fund
Templeton Global Opportunities Trust
Templeton Global Smaller Companies Fund
Templeton Growth Fund
Templeton World Fund

INTERNATIONAL
Franklin India Growth Fund
Franklin International Growth Fund
Franklin International Small Cap Growth Fund
Mutual European Fund
Templeton BRIC Fund
Templeton China World Fund
Templeton Developing Markets Trust
Templeton Emerging Markets Small Cap Fund
Templeton Foreign Fund
Templeton Foreign Smaller Companies Fund
Templeton Frontier Markets Fund

HYBRID
Franklin Balanced Fund
Franklin Convertible Securities Fund
Franklin Equity Income Fund
Franklin Income Fund
Templeton Income Fund

ASSET ALLOCATION
Franklin Templeton Corefolio(R) Allocation Fund
Franklin Templeton Founding Funds Allocation Fund
Franklin Templeton Perspectives Allocation Fund
Franklin Templeton Conservative Target Fund
Franklin Templeton Growth Target Fund
Franklin Templeton Moderate Target Fund
Franklin Templeton 2015 Retirement Target Fund
Franklin Templeton 2025 Retirement Target Fund
Franklin Templeton 2035 Retirement Target Fund
Franklin Templeton 2045 Retirement Target Fund

FIXED INCOME
Franklin Adjustable U.S. Government Securities Fund(5)
Franklin Floating Rate Daily Access Fund
Franklin High Income Fund
Franklin Limited Maturity U.S. Government Securities Fund(5)
Franklin Low Duration Total Return Fund
Franklin Real Return Fund
Franklin Strategic Income Fund
Franklin Strategic Mortgage Portfolio
Franklin Templeton Hard Currency Fund
Franklin Total Return Fund
Franklin U.S. Government Securities Fund(5)
Templeton Global Bond Fund
Templeton Global Total Return Fund
Templeton International Bond Fund

TAX-FREE INCOME(6)

NATIONAL FUNDS
Double Tax-Free Income Fund
Federal Tax-Free Income Fund
High Yield Tax-Free Income Fund
Insured Tax-Free Income Fund(7)

LIMITED-/INTERMEDIATE-TERM FUNDS
California Intermediate-Term Tax-Free Income Fund
Federal Intermediate-Term Tax-Free Income Fund
Federal Limited-Term Tax-Free Income Fund
New York Intermediate-Term Tax-Free Income Fund

STATE-SPECIFIC
Alabama
Arizona
California(8)
Colorado
Connecticut
Florida
Georgia
Kentucky
Louisiana
Maryland
Massachusetts(7)
Michigan(7)
Minnesota(7)
Missouri
New Jersey
New York(8)
North Carolina
Ohio(7)
Oregon
Pennsylvania
Tennessee
Virginia

INSURANCE FUNDS

Franklin Templeton Variable Insurance Products Trust(9)

(1.) The fund is closed to new investors. Existing shareholders and select
retirement plans can continue adding to their accounts.

(2.) The fund is a continuously offered, closed-end fund. Shares may be
purchased daily; there is no daily redemption. However, each quarter,
pending board approval, the fund will authorize the repurchase of 5%-25% of
the outstanding number of shares. Investors may tender all or a portion of
their shares during the tender period.

(3.) Effective 11/1/07, Franklin Aggressive Growth Fund changed its name to
Franklin Growth Opportunities Fund. The fund's investment goal and strategy
remained the same.

(4.) Effective 3/31/08, Franklin Small Cap Growth Fund II changed its name to
Franklin Small Cap Growth Fund. The fund's investment goal and strategy
remained the same.

(5.) An investment in the fund is neither insured nor guaranteed by the U.S.
government or by any other entity or institution.

(6.) For investors subject to the alternative minimum tax, a small portion of
fund dividends may be taxable. Distributions of capital gains are generally
taxable.

(7.) The fund invests primarily in insured municipal securities.

(8.) These funds are available in four or more variations, including long-term
portfolios, intermediate-term portfolios, portfolios of insured securities,
a high-yield portfolio (CA only) and money market portfolios.

(9.) The funds of the Franklin Templeton Variable Insurance Products Trust are
generally available only through insurance company variable contracts.

12/08 Not part of the annual report

(FRANKLIN TEMPLETON INVESTMENTS(R) LOGO) One Franklin Parkway
San Mateo, CA 94403-1906

WANT TO RECEIVE THIS DOCUMENT FASTER VIA EMAIL?

Eligible shareholders can sign up for eDelivery at franklintempleton.com. See
inside for details.

ANNUAL REPORT AND SHAREHOLDER LETTER

TEMPLETON
DEVELOPING MARKETS TRUST

INVESTMENT MANAGER

Templeton Asset Management Ltd.

PRINCIPAL UNDERWRITER

Franklin Templeton Distributors, Inc.
(800) DIAL BEN(R)
franklintempleton.com

SHAREHOLDER SERVICES

(800) 632-2301

Authorized for distribution only when accompanied or preceded by a prospectus.
Investors should carefully consider a fund's investment goals, risks, charges
and expenses before investing. Like any investment in securities, the value of
the Fund's portfolio will be subject to the risk of loss from market, currency,
economic, political and other factors. The Fund and its investors are not
protected from such losses by the investment manager. Therefore, investors who
cannot accept this risk should not invest in shares of the Fund. The prospectus
contains this and other information; please read it carefully before investing.

To ensure the highest quality of service, telephone calls to or from our service
departments may be monitored, recorded and accessed. These calls can be
identified by the presence of a regular beeping tone.

711 A2008 02/09

ITEM 2. CODE OF ETHICS.

(a) The Registrant has adopted a code of ethics that applies to its principal
executive officers and principal financial and accounting officer.

(d) N/A

(f) Pursuant to Item 12(a)(1), the Registrant is attaching as an exhibit a copy
of its code of ethics that applies to its principal executive officers and
principal financial and accounting officer.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

(a)(1) The Registrant has an audit committee financial expert serving on its
audit committee.

(2) The audit committee financial expert is David W. Niemiec he is "independent"
as defined under the relevant Securities and Exchange Commission Rules and
Releases.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

(a) Audit Fees

The aggregate fees paid to the principal accountant for professional services
rendered by the principal accountant for the audit of the registrant's annual
financial statements or for services that are normally provided by the principal
accountant in connection with statutory and regulatory filings or engagements
were $54,955 for the fiscal year ended December 31, 2008 and $90,959 for the
fiscal year ended December 31, 2007.

(b) Audit-Related Fees

There were no fees paid to the principal accountant for assurance and related
services rendered by the principal accountant to the registrant that are
reasonably related to the performance of the audit of the registrant's financial
statements and are not reported under paragraph (a) of Item 4.

There were no fees paid to the principal accountant for assurance and related
services rendered by the principal accountant to the registrant's investment
adviser and any entity controlling, controlled by or under common control with
the investment adviser that provides ongoing services to the registrant that are
reasonably related to the performance of the audit of their financial
statements.

The aggregate fees paid to the principal accountant for professional services
rendered by the principal accountant to the registrant for tax compliance, tax
advice and tax planning were $1,290 for the fiscal year ended December 31, 2008
and $0 for the fiscal year ended December 31, 2007. The services for which these
fees were paid included tax compliance and advice.

The aggregate fees paid to the principal accountant for professional services
rendered by the principal accountant to the registrant's investment adviser and
any entity controlling, controlled by or under common control with the
investment adviser that provides ongoing services to the registrant for tax
compliance, tax advice and tax planning were $4,000 for the fiscal year ended
December 31, 2008 and $46,000 for the fiscal year ended December 31, 2007. The
services for which these fees were paid included tax compliance and advice.

(d) All Other Fees

The aggregate fees paid to the principal accountant for products and services
rendered by the principal accountant to the registrant not reported in
paragraphs (a)-(c) of Item 4 were $3,700 for the fiscal year ended December 31,
2008 and $0 for the fiscal year ended December 31, 2007. The services for which
these fees were paid included review of materials provided to the fund Board in
connection with the investment management contract renewal process.

The aggregate fees paid to the principal accountant for products and services
rendered by the principal accountant to the registrant's investment adviser and
any entity controlling, controlled by or under common control with the
investment adviser that provides ongoing services to the registrant other than
services reported in paragraphs (a)-(c) of Item 4 were $280,377 for the fiscal
year ended December 31, 2008 and $0 for the fiscal year ended December 31, 2007.
The services for which these fees were paid included review of materials
provided to the fund Board in connect with the investment management contract
renewal process.

(e) (1) The registrant's audit committee is directly responsible for approving
the services to be provided by the auditors, including:

(i) pre-approval of all audit and audit related services;

(ii) pre-approval of all non-audit related services to be provided to
the Fund by the auditors;

(iii) pre-approval of all non-audit related services to be provided to
the registrant by the auditors to the registrant's investment adviser or to any
entity that controls, is controlled by or is under common control with the
registrant's investment adviser and that provides ongoing services to the
registrant where the non-audit services relate directly to the operations or
financial reporting of the registrant; and

(iv) establishment by the audit committee, if deemed necessary or
appropriate, as an alternative to committee pre-approval of services to be
provided by the auditors, as required by paragraphs (ii) and (iii) above, of
policies and procedures to permit such services to be pre-approved by other
means, such as through establishment of guidelines or by action of a designated
member or members of the committee; provided the policies and procedures are
detailed as to the particular service and the committee is informed of each
service and such policies and procedures do not include delegation of audit
committee responsibilities, as contemplated under the Securities Exchange Act of
1934, to management; subject, in the case of (ii) through (iv), to any waivers,
exceptions or exemptions that may be available under applicable law or rules.

(e) (2) None of the services provided to the registrant described in paragraphs
(b)-(d) of Item 4 were approved by the audit committee pursuant to paragraph
(c)(7)(i)(C) of Rule 2-01 of regulation S-X.

(f) No disclosures are required by this Item 4(f).

(g) The aggregate non-audit fees paid to the principal accountant for services
rendered by the principal accountant to the registrant and the registrant's
investment adviser and any entity controlling, controlled by or under common
control with the investment adviser that provides ongoing services to the
registrant were $289,367 for the fiscal year ended December 31, 2008 and $46,000
for the fiscal year ended December 31, 2007.

(h) The registrant's audit committee of the board has considered whether the
provision of non-audit services that were rendered to the registrant's
investment adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or under common control
with the investment adviser that provides ongoing services to the registrant
that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of
Regulation S-X is compatible with maintaining the principal accountant's
independence.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. N/A

ITEM 6. SCHEDULE OF INVESTMENTS. N/A

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES. N/A

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. N/A

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS. N/A

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

There have been no changes to the procedures by which shareholders may recommend
nominees to the Registrant's Board of Trustees that would require disclosure
herein.

ITEM 11. CONTROLS AND PROCEDURES.

(a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. The Registrant maintains
disclosure controls and procedures that are designed to ensure that information
required to be disclosed in the Registrant's filings under the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 is recorded,
processed, summarized and reported within the periods specified in the rules and
forms of the Securities and Exchange Commission. Such information is accumulated
and communicated to the Registrant's management, including its principal
executive officer and principal financial officer, as appropriate, to allow
timely decisions regarding required disclosure. The Registrant's management,
including the principal executive officer and the principal financial officer,
recognizes that any set of controls and procedures, no matter how well designed
and operated, can provide only reasonable assurance of achieving the desired
control objectives.

Within 90 days prior to the filing date of this Shareholder Report on Form
N-CSR, the Registrant had carried out an evaluation, under the supervision and
with the participation of the Registrant's management, including the
Registrant's principal executive officer and the Registrant's principal
financial officer, of the effectiveness of the design and operation of the
Registrant's disclosure controls and procedures. Based on such evaluation, the
Registrant's principal executive officer and principal financial officer
concluded that the Registrant's disclosure controls and procedures are
effective.

(b) CHANGES IN INTERNAL CONTROLS. There have been no significant changes in the
Registrant's internal controls or in other factors that could significantly
affect the internal controls subsequent to the date of their evaluation in
connection with the preparation of this Shareholder Report on Form N-CSR.

ITEM 12. EXHIBITS.

(a)(1) Code of Ethics

(a) (2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
of Jennifer J. Bolt, Chief Executive Officer - Finance and Administration, and
Laura F. Fergerson, Chief Financial Officer and Chief Accounting Officer

(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of
Jennifer J. Bolt, Chief Executive Officer - Finance and Administration, and
Laura F. Fergerson, Chief Financial Officer and Chief Accounting Officer

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

TEMPLETON DEVELOPING MARKETS TRUST

By /s/JENNIFER J. BOLT
- -----------------------------------
Jennifer J. Bolt
Chief Executive Officer -
Finance and Administration
Date February 25, 2009

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

By /s/JENNIFER J. BOLT
- -----------------------------------
Jennifer J. Bolt
Chief Executive Officer -
Finance and Administration
Date February 25, 2009

By /s/LAURA F. FERGERSON
- ----------------------------------
Laura F. Fergerson
Chief Financial Officer and
Chief Accounting Officer
Date February 25, 2009