FORM 5 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b). Form 3 Holdings Reported Form 4 Transactions Reported

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ANNUAL STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person * GROSS WILLIAM H 2. Issuer Name and Ticker or Trading Symbol PIMCO MUNICIPAL INCOME FUND III [PMX] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) _____ Director _____ 10% Owner _____ Officer (give title below) __X__ Other (specify below) EXECUTIVE COMMITTEE MEMBER (Last) (First) (Middle) 840 NEWPORT CENTER DRIVE, SUITE 100 3. Statement for Issuer's Fiscal Year Ended (Month/Day/Year) 09/30/2008 (Street) NEWPORT BEACH, CA 92660 4. If Amendment, Date Original Filed(Month/Day/Year) 6. Individual or Joint/Group Reporting (check applicable line) _X_ Form Filed by One Reporting Person ___ Form Filed by More than One Reporting Person (City) (State) (Zip) Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned

1.Title of Security (Instr. 3) 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned at end of Issuer's Fiscal Year (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Amount (A) or (D) Price COMMON STOCK 05/09/2003   P4 11,666 (1) A $ 14.4971 11,666 I BY CHILD'S TRUST #1 COMMON STOCK 05/09/2003   P4 11,667 (1) A $ 14.4971 11,667 I BY CHILD'S TRUST #2 COMMON STOCK 05/09/2003   P4 11,667 (1) A $ 14.4971 11,667 I BY CHILD'S TRUST #3 COMMON STOCK 05/22/2003   P4 666 (1) A $ 14.63 666 I BY CHILD'S TRUST #1 COMMON STOCK 05/22/2003   P4 666 (1) A $ 14.63 666 I BY CHILD'S TRUST #2 COMMON STOCK 05/22/2003   P4 668 (1) A $ 14.63 668 I BY CHILD'S TRUST #3 COMMON STOCK 02/07/2005   P4 767 A $ 14.97 767 I BY CHILD'S TRUST #1 COMMON STOCK 02/07/2005   P4 766 A $ 14.97 766 I BY CHILD'S TRUST #2 COMMON STOCK 02/07/2005   P4 767 A $ 14.97 767 I BY CHILD'S TRUST #3 COMMON STOCK 02/08/2005   P4 833 A $ 14.97 833 I BY CHILD'S TRUST #1 COMMON STOCK 02/08/2005   P4 834 A $ 14.97 834 I BY CHILD'S TRUST #2 COMMON STOCK 02/08/2005   P4 833 A $ 14.97 833 I BY CHILD'S TRUST #3 COMMON STOCK 02/09/2005   P4 15,067 A $ 14.9597 15,067 I BY CHILD'S TRUST #1 COMMON STOCK 02/09/2005   P4 15,066 A $ 14.9597 15,066 I BY CHILD'S TRUST #2 COMMON STOCK 02/09/2005   P4 15,067 A $ 14.9597 15,067 I BY CHILD'S TRUST #3 COMMON STOCK 12/20/2006   G4 370,700 D $ 0 370,700 D   COMMON STOCK 12/05/2007   S4 1,600 D $ 14.53 1,600 D   COMMON STOCK 12/06/2007   S4 4,100 D $ 14.53 4,100 D   COMMON STOCK 12/10/2007   S4 25,811.066 D $ 14.22 40,000 (2) (3) D   COMMON STOCK             28,999 (2) (3) I BY CHILD'S TRUST #1 COMMON STOCK             28,999 (2) (3) I BY CHILD'S TRUST #2 COMMON STOCK             29,002 (2) (3) I BY CHILD'S TRUST #3

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.

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SEC 2270 (9-02)

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)

1. Title of Derivative Security (Instr. 3)

2. Conversion or Exercise Price of Derivative Security

3. Transaction Date (Month/Day/Year)

3A. Deemed Execution Date, if any (Month/Day/Year)

4. Transaction Code (Instr. 8)

5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5)

6. Date Exercisable and Expiration Date (Month/Day/Year)

7. Title and Amount of Underlying Securities (Instr. 3 and 4)

8. Price of Derivative Security (Instr. 5)

9. Number of Derivative Securities Beneficially Owned at End of Issuer's Fiscal Year (Instr. 4)

10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4)

11. Nature of Indirect Beneficial Ownership (Instr. 4)

(A)

(D)

Date Exercisable

Expiration Date

Title

Amount or Number of Shares

Reporting Owners

Reporting Owner Name / Address	Relationships
	Director	10% Owner	Officer	Other
GROSS WILLIAM H 840 NEWPORT CENTER DRIVE SUITE 100 NEWPORT BEACH, CA 92660	Â	Â	Â	EXECUTIVE COMMITTEE MEMBER

Signatures

/S/ STEVEN LUDWIG, ATTORNEY-IN-FACT FOR WILLIAM H. GRO		12/22/2008
**Signature of Reporting Person		Date

Explanation of Responses:

*	If the form is filed by more than one reporting person, see Instruction 4(b)(v).
**	Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1)	The Form 5 filed on behalf of the Reporting Person on 04/15/04 under issuer PIMCO Municipal Income Fund II ("PML") reported the acquisition of an aggregate 37,000 shares (the "Shares") held in the name of the Reporting Person's childrens' trusts. It was subsequently determined that the Shares should have been filed as an acquisition under this issuer, PIMCO Municipal Income Fund III ("PMX").
(2)	The Form 5 filed on behalf of the Reporting Person on 04/15/04 under this issuer, PIMCO Municipal Income Fund III ("PMX"), reported the acquisition of 86,400 shares (the "Shares") held in the name of the Reporting Person's children. It was subsequently determined that the Shares should have been filed as an acquisition under a different fund, PIMCO Municipal Income Fund II ("PML"). Such Shares have been reported as an acquisition under issuer PML on Form 5 filed on the date hereof and the current holdings for this issuer, PMX, as reported on this Form 5 excludes such Shares. Additionally, the Reporting Person acquired an aggregate of 17,261.0660 shares (the "Reinvestment Shares") on various dates under a qualifying dividend reinvestment plan. The Reinvestment Shares were not previously reported in the Reporting Person's aggregate holdings and all such Shares have been sold in previously reported transactions.
(3)	Reflects the aggregate form and amount of securities beneficially owned as of the FYE reported in Box 3.
  Remarks: Pacific Investment Management Company LLC (PIMCO) is the investment adviser of the issuer.  Mr. Gross is a member of PIMCO's Executive Committee.

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