UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-06444

Legg Mason Partners Equity Trust

(Exact name of registrant as specified in charter)

55 Water Street, New York, NY 10041

(Address of principal executive offices) (Zip code)

Robert I. Frenkel, Esq.

Legg Mason & Co., LLC

100 First Stamford Place

Stamford, CT 06902

(Name and address of agent for service)

Registrant’s telephone number, including area code:

1-877-721-1926

Date of fiscal year end: September 30,

Date of reporting period: December 31, 2010

ITEM 1. SCHEDULE OF INVESTMENTS

LEGG MASON PARTNERS EQUITY TRUST

LEGG MASON CLEARBRIDGE

FUNDAMENTAL ALL CAP VALUE FUND

FORM N-Q

DECEMBER 31, 2010

LEGG MASON CLEARBRIDGE FUNDAMENTAL ALL CAP VALUE FUND

Schedule of investments (unaudited) December 31, 2010

SECURITY	SHARES		VALUE
COMMON STOCKS - 99.3%
CONSUMER DISCRETIONARY - 9.0%
Hotels, Restaurants & Leisure - 1.5%
Carnival Corp.		738,030	$	34,030,563
Leisure Equipment & Products - 1.4%
Mattel Inc.		1,263,090		32,120,379
Media - 2.4%
Walt Disney Co.		1,480,910		55,548,934
Specialty Retail - 3.7%
Gap Inc.		1,170,117		25,906,390
Home Depot Inc.		1,726,300		60,524,078
Total Specialty Retail				86,430,468
TOTAL CONSUMER DISCRETIONARY				208,130,344
CONSUMER STAPLES - 5.1%
Food & Staples Retailing - 2.6%
Safeway Inc.		2,696,270		60,639,112
Food Products - 2.5%
Unilever PLC		979,950		29,991,485
Unilever PLC, ADR		867,850		26,799,208
Total Food Products				56,790,693
TOTAL CONSUMER STAPLES				117,429,805
ENERGY - 15.0%
Energy Equipment & Services - 7.1%
Baker Hughes Inc.		860,230		49,179,349
Halliburton Co.		1,365,530		55,754,590
Schlumberger Ltd.		687,550		57,410,425
Total Energy Equipment & Services				162,344,364
Oil, Gas & Consumable Fuels - 7.9%
ConocoPhillips		697,150		47,475,915
Devon Energy Corp.		585,600		45,975,456
Hess Corp.		820,750		62,820,205
Noble Energy Inc.		297,990		25,650,979
Total Oil, Gas & Consumable Fuels				181,922,555
TOTAL ENERGY				344,266,919
FINANCIALS - 21.9%
Capital Markets - 6.9%
Bank of New York Mellon Corp.		1,518,110		45,846,922
BlackRock Inc.		128,040		24,401,863
Franklin Resources Inc.		265,820		29,561,842
Morgan Stanley		2,127,920		57,900,703
Teton Advisors Inc., Class A Shares		1,750		17,282	*
Total Capital Markets				157,728,612
Commercial Banks - 2.7%
First Republic Bank		120,800		3,517,696	*
KeyCorp		2,721,610		24,086,248
U.S. Bancorp		1,303,500		35,155,395
Total Commercial Banks				62,759,339
Diversified Financial Services - 4.6%
Bank of America Corp.		1,712,370		22,843,016
JPMorgan Chase & Co.		1,952,940		82,843,715
Total Diversified Financial Services				105,686,731
Insurance - 4.1%
Allied World Assurance Co. Holdings Ltd.		720,730		42,840,191
Chubb Corp.		855,160		51,001,743
Total Insurance				93,841,934
Real Estate Investment Trusts (REITs) - 1.8%
Pebblebrook Hotel Trust		859,600		17,467,072
Weyerhaeuser Co.		1,336,111		25,292,581
Total Real Estate Investment Trusts (REITs)				42,759,653

See Notes to Schedule of Investments.

1

LEGG MASON CLEARBRIDGE FUNDAMENTAL ALL CAP VALUE FUND

Schedule of investments (unaudited) (cont’d) December 31, 2010

SECURITY	SHARES		VALUE
Real Estate Management & Development - 1.8%
Jones Lang LaSalle Inc.		493,040	$	41,375,917
TOTAL FINANCIALS				504,152,186
HEALTH CARE - 7.8%
Life Sciences Tools & Services - 0.4%
Enzo Biochem Inc.		1,869,326		9,870,041	*
Pharmaceuticals - 7.4%
GlaxoSmithKline PLC, ADR		503,160		19,733,935
Johnson & Johnson		664,730		41,113,551
Merck & Co. Inc.		1,483,240		53,455,970
Novartis AG, ADR		925,860		54,579,447
Total Pharmaceuticals				168,882,903
TOTAL HEALTH CARE				178,752,944
INDUSTRIALS - 15.4%
Aerospace & Defense - 5.5%
Boeing Co.		628,880		41,040,709
Honeywell International Inc.		820,440		43,614,590
Northrop Grumman Corp.		656,470		42,526,127
Total Aerospace & Defense				127,181,426
Construction & Engineering - 1.7%
EMCOR Group Inc.		174,342		5,052,431	*
Fluor Corp.		388,030		25,710,868
Jacobs Engineering Group Inc.		162,270		7,440,079	*
Total Construction & Engineering				38,203,378
Electrical Equipment - 1.1%
Babcock & Wilcox Co.		993,375		25,420,466	*
Industrial Conglomerates - 1.8%
McDermott International Inc.		1,967,830		40,714,403	*
Machinery - 5.3%
Deere & Co.		676,810		56,209,070
Dover Corp.		526,290		30,761,651
Oshkosh Corp.		112,455		3,962,914	*
Parker Hannifin Corp.		365,250		31,521,075
Total Machinery				122,454,710
TOTAL INDUSTRIALS				353,974,383
INFORMATION TECHNOLOGY - 18.0%
Communications Equipment - 4.0%
Cisco Systems Inc.		2,243,880		45,393,692	*
Telefonaktiebolaget LM Ericsson, ADR		4,053,090		46,732,128
Total Communications Equipment				92,125,820
Internet Software & Services - 2.7% eBay Inc.		2,194,490		61,072,657	*
Semiconductors & Semiconductor Equipment - 8.3%
Applied Materials Inc.		3,853,580		54,142,799
Samsung Electronics Co., Ltd., GDR		162,800		68,685,320	(a)
Texas Instruments Inc.		2,105,500		68,428,750
Total Semiconductors & Semiconductor Equipment				191,256,869
Software - 3.0%
Lawson Software Inc.		1,860,900		17,213,325	*
Microsoft Corp.		1,866,450		52,111,284
Total Software				69,324,609
TOTAL INFORMATION TECHNOLOGY				413,779,955
MATERIALS - 3.7%
Metals & Mining - 3.7%
BHP Billiton Ltd., ADR		268,770		24,974,109
Nucor Corp.		442,860		19,406,125
United States Steel Corp.		689,260		40,266,569
TOTAL MATERIALS				84,646,803

See Notes to Schedule of Investments.

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LEGG MASON CLEARBRIDGE FUNDAMENTAL ALL CAP VALUE FUND

Schedule of investments (unaudited) (cont’d) December 31, 2010

SECURITY						SHARES		VALUE
TELECOMMUNICATION SERVICES - 3.4%
Diversified Telecommunication Services - 1.3%
AT&T Inc.							1,008,270	$	29,622,973
Wireless Telecommunication Services - 2.1%
Vodafone Group PLC, ADR							1,832,252		48,426,420
TOTAL TELECOMMUNICATION SERVICES									78,049,393
TOTAL INVESTMENTS BEFORE SHORT-TERM INVESTMENTS (Cost - $1,755,425,488)									2,283,182,732
	RATE			MATURITY DATE		FACE AMOUNT
SHORT-TERM INVESTMENTS - 1.1%
Repurchase Agreements - 1.1%
Interest in $50,001,000 joint tri-party repurchase agreement dated 12/31/10 with RBS Securities Inc.; Proceeds at maturity - $24,713,515; (Fully collateralized by U.S. government obligations, 2.750% due 2/15/19; Market value - $25,209,500) (Cost - $24,713,000)		0.250	%		1/3/11	$	24,713,000		24,713,000
TOTAL INVESTMENTS - 100.4% (Cost - $1,780,138,488#)									2,307,895,732
Liabilities in Excess of Other Assets - (0.4)%									(10,314,360	)
TOTAL NET ASSETS - 100.0%								$	2,297,581,372

* Non-income producing security.

# Aggregate cost for federal income tax purposes is substantially the same.

(a) Security is exempt from registration under Rule 144A of the Securities Act of 1933. This security may be resold in transactions that are exempt from registration, normally to qualified institutional buyers. This security has been deemed liquid pursuant to guidelines approved by the Board of Trustees, unless otherwise noted.

Abbreviations used in this schedule:
ADR	— American Depositary Receipt
GDR	— Global Depositary Receipt

See Notes to Schedule of Investments.

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Notes to Schedule of Investments (unaudited)

1. Organization and Significant Accounting Policies

Legg Mason ClearBridge Fundamental All Cap Value Fund (the “Fund”) is a separate diversified investment series of Legg Mason Partners Equity Trust (the “Trust”). The Trust, a Maryland statutory trust, is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company.

The following are significant accounting policies consistently followed by the Fund and are in conformity with U.S. generally accepted accounting principles (“GAAP”).

(a) Investment Valuation. Equity securities for which market quotations are available are valued at the last reported sales price or official closing price on the primary market or exchange on which they trade. Debt securities are valued at the mean between the last quoted bid and asked prices provided by an independent pricing service, which are based on transactions in debt obligations, quotations from bond dealers, market transactions in comparable securities and various other relationships between securities. When reliable prices are not readily available, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded, but before the Fund calculates its net asset value, the Fund values these securities as determined in accordance with procedures approved by the Fund’s Board of Trustees. Short-term obligations with maturities of 60 days or less are valued at amortized cost, which approximates fair value.

The Fund has adopted Financial Accounting Standards Board Codification Topic 820 (“ASC Topic 820”). ASC Topic 820 establishes a single definition of fair value, creates a three-tier hierarchy as a framework for measuring fair value based on inputs used to value the Fund’s investments, and requires additional disclosure about fair value. The hierarchy of inputs is summarized below.

• Level 1 – quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, 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 necessarily an indication of the risk associated with investing in those securities.

The Fund uses valuation techniques to measure fair value that are consistent with the market approach and/or income approach, depending on the type of security and the particular circumstance. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable securities. The income approach uses valuation techniques to discount estimated future cash flows to present value.

The following is a summary of the inputs used in valuing the Fund’s assets carried at fair value:

ASSETS
DESCRIPTION	QUOTED PRICES (LEVEL 1)		OTHER SIGNIFICANT OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)		TOTAL
Common stocks†	$	2,283,182,732		—		—	$	2,283,182,732
Short-term investments†		—	$	24,713,000		—		24,713,000
Total investments	$	2,283,182,732	$	24,713,000		—	$	2,307,895,732

† See Schedule of Investments for additional detailed categorizations.

(b) Repurchase Agreements. The Fund may enter into repurchase agreements with institutions that its investment adviser has determined are creditworthy. Each repurchase agreement is recorded at cost. Under the terms of a typical repurchase agreement, the Fund acquires a debt security subject to an obligation of the seller to repurchase, and of the Fund to resell, the security at an agreed-upon price and time, thereby determining the yield during the Fund’s holding period. When entering into repurchase agreements, it is the Fund’s policy that its custodian or a third party custodian, acting on the Fund’s behalf, take possession of the underlying collateral securities, the market value of which, at all

4

Notes to Schedule of Investments (unaudited) (continued)

times, at least equals the principal amount of the repurchase transaction, including accrued interest. To the extent that any repurchase transaction maturity exceeds one business day, the value of the collateral is marked-to-market and measured against the value of the agreement in an effort to ensure the adequacy of the collateral. If the counterparty defaults, the Fund generally has the right to use the collateral to satisfy the terms of the repurchase transaction. However, if the market value of the collateral declines during the period in which the Fund seeks to assert its rights or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Fund may be delayed or limited.

(c) Foreign Currency Translation. Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts based upon prevailing exchange rates on the date of valuation. Purchases and sales of investment securities and income and expense items denominated in foreign currencies are translated into U.S. dollar amounts based upon prevailing exchange rates on the respective dates of such transactions.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

(d) Security Transactions. Security transactions are accounted for on a trade date basis.

2. Investments

At December 31, 2010, the aggregate gross unrealized appreciation and depreciation of investments for federal income tax purposes were substantially as follows:

Gross unrealized appreciation	$	567,630,671
Gross unrealized depreciation		(39,873,427	)
Net unrealized appreciation	$	527,757,244

3. Derivative Instruments and Hedging Activities

Financial Accounting Standards Board Codification Topic 815 requires enhanced disclosure about an entity’s derivative and hedging activities.

During the period ended December 31, 2010, the Fund did not invest in any derivative instruments.

5

ITEM 2. CONTROLS AND PROCEDURES.

(a) The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a- 3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the disclosure controls and procedures required by Rule 30a-3(b) under the 1940 Act and 15d-15(b) under the Securities Exchange Act of 1934.

(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant’s last fiscal quarter that have materially affected, or are likely to materially affect the registrant’s internal control over financial reporting.

ITEM 3. EXHIBITS.

Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are attached hereto.

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.

Legg Mason Partners Equity Trust
By	/S/    R. JAY GERKEN
	R. Jay Gerken
	Chief Executive Officer
Date:	February 23, 2011

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/    R. JAY GERKEN
	R. Jay Gerken
	Chief Executive Officer
Date:	February 23, 2011
By	/S/    KAPREL OZSOLAK
	Kaprel Ozsolak
	Chief Financial Officer
Date:	February 23, 2011