SEI TAX EXEMPT TRUST, 497, 2000-06-02

SEI TAX EXEMPT TRUST
497, 2000-06-02

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<PAGE>
SEI Tax
Exempt Trust
ABOUT THIS PROSPECTUS
------------------------------------------------------------------------

SEI Tax Exempt Trust is a mutual fund family that offers different classes of
shares in separate investment portfolios (Funds). This prospectus gives you
important information about the Class C Shares of the California Tax Exempt Fund
and the Institutional Tax Free Fund that you should know before investing.
Please read this prospectus and keep it for future reference.

THIS PROSPECTUS HAS BEEN ARRANGED INTO DIFFERENT SECTIONS SO THAT YOU CAN EASILY
REVIEW THIS IMPORTANT INFORMATION. ON THE NEXT PAGE, THERE IS SOME GENERAL
INFORMATION YOU SHOULD KNOW ABOUT RISK AND RETURN. FOR MORE DETAILED INFORMATION
ABOUT THE FUNDS, PLEASE SEE:

CALIFORNIA TAX EXEMPT FUND...........................................2
INSTITUTIONAL TAX FREE FUND..........................................4
MORE INFORMATION ABOUT FUND INVESTMENTS..............................6
THE INVESTMENT ADVISER...............................................6
PURCHASING AND SELLING FUND SHARES...................................7
DIVIDENDS, DISTRIBUTIONS AND TAXES...................................9
FINANCIAL HIGHLIGHTS................................................10
HOW TO OBTAIN MORE INFORMATION ABOUT SEI TAX EXEMPT TRUST...Back Cover

--------------------------------------------------------------------------------
MUNICIPAL SECURITIES

The Funds invest primarily in municipal securities. Municipal securities are
bonds and other fixed income securities issued by state and local governments
and their agencies (such as housing or hospital authorities) to finance capital
expenditures and operations. The obligation to pay principal and interest on
municipal securities may be a general obligation of the state or local
government, but may be supported only by an agency or a particular source of
revenues. Therefore, municipal securities vary in credit quality.

Municipal securities, like other fixed income securities, rise and fall in value
in response to economic and market factors, primarily changes in interest rates,
and actual or perceived credit quality. Rising interest rates will generally
cause municipal securities to decline in value. Longer-term securities respond
more sharply to interest rate changes than do shorter-term securities. A
municipal security will also lose value if, due to rating downgrades or other
factors, there are concerns about the issuer's current or future ability to make
principal or interest payments. A strategy to invest in investment grade
securities reduces but does not eliminate this risk.

Generally, the income from municipal securities is exempt from Federal income
tax, and also may be exempt from certain state or local tax depending on an
investor's state of residence. Even so, income from certain obligations may be
subject to Federal alternative minimum tax.
<PAGE>
PROSPECTUS 1

RISK/RETURN INFORMATION COMMON TO THE FUNDS

Each Fund is a mutual fund. A mutual fund pools shareholders' money and, using
professional investment managers, invests it in securities.

Each Fund has its own investment goal and strategies for reaching that goal.
Each Fund's assets are managed under the direction of its Adviser. The Adviser
invests each Fund's assets in a way that it believes will help the Funds achieve
their goal. Still, investing in the Funds involves risk, and there is no
guarantee that a Fund will achieve its goal. In fact, no matter how good a job
the Adviser does, you could lose money on your investment in the Fund, just as
you could with other investments. A Fund share is not a bank deposit and it is
not insured or guaranteed by the FDIC or any other government agency.

ALTHOUGH THE FUNDS ARE MANAGED TO MAINTAIN A CONSTANT PRICE PER SHARE OF $1.00,
IT IS
POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUNDS.
<PAGE>
2 PROSPECTUS

CALIFORNIA TAX EXEMPT FUND

INVESTMENT SUMMARY

<TABLE>
<S> <C>
INVESTMENT GOAL Preserving principal and maintaining liquidity
while providing current income exempt from Federal
and California personal income taxes
------------------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY Very low
------------------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing an adviser experienced in selecting
municipal securities, the Fund invests in high
quality, short-term California municipal money
market securities
</TABLE>

------------------------------------------------------------------------

INVESTMENT STRATEGY

The California Tax Exempt Fund invests substantially all (at least 80%) of its
assets in municipal money market securities that pay interest that is exempt
from Federal and California income taxes. The principal issuers of these
securities are state and local governments and agencies located in California,
as well as Puerto Rico and other U.S. territories and possessions.

The Adviser purchases liquid securities with appropriate maturities that offer
competitive yields, and that are issued by financially sound issuers. The
Adviser also considers sector allocation and relative valuations in selecting
securities for the Fund.

The Fund invests in high quality, short-term debt securities, commonly known as
money market instruments. These include municipal bonds, notes and tax exempt
commercial paper, as well as certain taxable securities and repurchase
agreements. The Fund may, to a limited extent, invest in securities subject to
the alternative minimum tax or in taxable municipal securities. The Fund follows
strict SEC rules about the credit risk, maturity and diversification of its
investments.

WHAT ARE THE RISKS OF INVESTING IN THE FUND?

An investment in the Fund is subject to income risk, which is the possibility
that the Fund's yield will decline due to falling interest rates.

State and local governments rely on taxes, and to some extent, revenues from
private projects financed by municipal securities to pay interest and principal
on municipal debt. There may be economic or political changes that impact the
ability of issuers of California municipal securities to repay principal and to
make interest payments on securities owned by the Fund. Changes to the financial
condition of California municipal issuers also may adversely affect the value of
the Fund's securities. For example, financial difficulties of the State, its
counties, municipalities and school districts that hinder efforts to borrow and
lower credit ratings are factors which may affect the Fund. In addition, actual
or perceived credit-worthiness of municipal issuers may reduce the value of the
Fund's holdings. As a result, the Fund will be more susceptible to factors which
adversely affect issuers of California obligations than a mutual fund which does
not have as great a concentration in California municipal obligations.

Since the Fund often purchases securities supported by credit enhancements from
banks and other financial institutions, changes in the credit quality of these
institutions could cause losses to the Fund and affect its share price.

AN INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT. ALTHOUGH THE FUND SEEKS TO
MAINTAIN A CONSTANT PRICE PER SHARE OF $1.00, YOU MAY LOSE MONEY BY INVESTING IN
THE FUND.
<PAGE>
PROSPECTUS 3

CALIFORNIA TAX EXEMPT FUND

PERFORMANCE INFORMATION

The bar chart and the performance table below illustrate the risks and
volatility of an investment in the Fund. Of course, the Fund's past performance
does not necessarily indicate how the Fund will perform in the future.

This bar chart shows changes in the performance of the Fund's Class A Shares
from year to year for eight years. Since Class A Shares are invested in the same
portfolio of securities, returns for Class C Shares will be substantially
similar to those of the Class A Shares, shown here, and will differ only to the
extent that each class has different expenses.*

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
BEST QUARTER WORST QUARTER
<S> <C>
1.15% 0.50%
(3/31/91) (3/31/94)
</TABLE>

* THE PERFORMANCE INFORMATION SHOWN ABOVE IS BASED ON A CALENDAR YEAR. THE
FUND'S CLASS A TOTAL RETURN FROM JANUARY 1, 1999, TO SEPTEMBER 30, 1999, WAS
2.03%.
This table shows the Fund's average annual total returns for the periods ended
December 31, 1998.

<TABLE>
<CAPTION>
SINCE
1 YEAR 5 YEARS INCEPTION
<S> <C> <C> <C>
---------------------------------------------------------------
CALIFORNIA TAX EXEMPT FUND- CLASS A
SHARES 3.02% 3.19% 3.39%*
---------------------------------------------------------------
</TABLE>

* THE INCEPTION DATE FOR CLASS A SHARES OF THE FUND IS MAY 14, 1990. AS OF
SEPTEMBER 30, 1999, CLASS C SHARES OF THE FUND WERE NOT YET OPEN TO INVESTORS.

Please dial 1-800-DIAL-SEI to obtain the Fund's current yield.

--------------------------------------------------------------------------------
------------------------------------------------------------------------
FUND FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.

<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS) CLASS C SHARES
<S> <C>
Investment Advisory Fees 0.04%
Distribution (12b-1) Fees None
Other Expenses 0.76%
-----
Total Annual Fund Operating Expenses 0.80%*
</TABLE>

* THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE MOST RECENT
FISCAL YEAR WERE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADMINISTRATOR AND
DISTRIBUTOR ARE EACH VOLUNTARILY WAIVING A PORTION OF THEIR FEES IN ORDER TO
KEEP TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADMINISTRATOR AND/OR
DISTRIBUTOR MAY DISCONTINUE ALL OR PART OF THESE WAIVERS AT ANY TIME. WITH THESE
FEE WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:

<TABLE>
<S> <C>
CALIFORNIA TAX EXEMPT FUND -- CLASS C SHARES 0.78%
</TABLE>

FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER" AND
"DISTRIBUTION OF FUND SHARES."

EXAMPLE

This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the Fund for the time periods indicated and that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
California Tax Exempt Fund --
Class C Shares $82 $255 $444 $990
</TABLE>

<PAGE>
4 PROSPECTUS

INSTITUTIONAL TAX FREE FUND

INVESTMENT SUMMARY

<TABLE>
<S> <C>
INVESTMENT GOAL Preserving principal and maintaining liquidity
while providing current income exempt from Federal
income taxes.
------------------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY Very low
------------------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing an adviser experienced in selecting
municipal securities, the Fund invests in high
quality, short-term tax-exempt money market
securities.
</TABLE>

------------------------------------------------------------------------

INVESTMENT STRATEGY

The Institutional Tax Free Fund invests substantially all (at least 80%) of its
assets in municipal money market securities that pay interest that is exempt
from Federal income taxes. The issuers of these securities are state and local
government agencies located in all fifty states, Puerto Rico, and other U.S.
territories and possessions.

WHAT ARE THE RISKS OF INVESTING IN THE FUND?

An investment in the Fund is subject to income risk, which is the possibility
that the Fund's yield will decline due to falling interest rates.

State and local governments rely on taxes, and to some extent, revenues from
private projects financed by municipal securities, to pay interest and principal
on municipal debt. There may be economic or political changes that impact the
ability of municipal issuers to repay principal and to make interest payments on
securities owned by the Fund. Changes to the financial condition or credit
rating of municipal issuers also may adversely affect the value of the Fund's
securities. The Fund's securities may change in value in response to changes in
interest rates and other factors. In addition, actual or perceived erosion of
the credit-worthiness of municipal issuers may reduce the value of the Fund's
holdings.

INSTITUTIONAL TAX FREE FUND

PERFORMANCE INFORMATION

This bar chart shows changes in the performance of the Fund's Class C Shares
from year to year for three years.*

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
BEST QUARTER WORST QUARTER
<S> <C>
0.78% 0.67%
(12/31/97) (3/31/97)
</TABLE>

* THE PERFORMANCE INFORMATION SHOWN ABOVE IS BASED ON A CALENDAR YEAR. THE
FUND'S CLASS C TOTAL RETURN FROM JANUARY 1, 1999, TO SEPTEMBER 30, 1999, WAS
1.87%.

This table shows the Fund's average annual total returns for the periods ended
December 31, 1998.

<TABLE>
<CAPTION>
SINCE
1 YEAR 5 YEARS INCEPTION
<S> <C> <C> <C>
---------------------------------------------------------------
INSTITUTIONAL TAX FREE FUND --
CLASS C SHARES 2.81% N/A 2.94%*
---------------------------------------------------------------
</TABLE>

* THE INCEPTION DATE FOR CLASS C SHARES OF THE FUND IS SEPTEMBER 11, 1995.

Please dial 1-800-DIAL-SEI to obtain the Fund's current yield.

--------------------------------------------------------------------------------
------------------------------------------------------------------------
FUND FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.

<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS) CLASS C SHARES
<S> <C>
Investment Advisory Fees 0.04%
Distribution (12b-1) Fees None
Other Expenses 0.89%
----------
Total Annual Fund Operating Expenses 0.93%*
</TABLE>

<TABLE>
<S> <C>
INSTITUTIONAL TAX FREE FUND -- CLASS C SHARES 0.83%
</TABLE>

FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER" AND
"DISTRIBUTION OF FUND SHARES."

EXAMPLE

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Institutional Tax Free Fund --
Class C Shares $95 $296 $515 $1,143
</TABLE>

<PAGE>
6 PROSPECTUS

MORE INFORMATION ABOUT FUND INVESTMENTS

This prospectus describes the Funds' primary investment strategies. The Funds
may invest in other securities, use other strategies and engage in other
investment practices, which are described in detail in the Funds' Statement of
Additional Information ("SAI").

The investments and strategies described in this prospectus are those that the
Funds use under normal conditions. During unusual economic or market conditions,
or for temporary defensive or liquidity purposes, each Fund may invest up to
100% of its assets in cash or cash equivalents that would not ordinarily be
consistent with the Funds' objectives. Of course, there is no guarantee that any
Fund will achieve its investment goal.

INVESTMENT ADVISER

The Investment Adviser makes investment decisions for the Funds and continuously
reviews, supervises and administers the Funds' investment program. The Board of
Trustees supervises the Adviser and establishes policies that the Adviser must
follow in its management activities.

Weiss, Peck & Greer, L.L.C. ("WPG"), a wholly owned subsidiary of Robeco Group,
serves as the Adviser to the Funds. As of August 31, 1999, WPG had approximately
$16.5 billion in assets under management. For the fiscal year ended August 31,
1999, WPG received advisory fees of:

<TABLE>
<S> <C>
California Tax Exempt Fund 0.04%
Institutional Tax Free Fund 0.04%
</TABLE>

Janet Fiorenza, a portfolio manager at WPG, has managed the Funds since 1990.
Ms. Fiorenza has been with WPG since 1988, and with its predecessor since 1980.
She has more than 19 years of investment experience.
<PAGE>
PROSPECTUS 7

PURCHASING AND SELLING FUND SHARES

This section tells you how to purchase or sell (sometimes called "redeem")
shares of the Funds. The Funds offer Class C Shares only to financial
institutions or intermediaries for their own or their customers' accounts. For
information on how to open an account and set up procedures for placing
transactions, please call 1-800-DIAL-SEI.

HOW TO PURCHASE FUND SHARES

You may purchase shares on any day that the New York Stock Exchange ("NYSE") is
open for business (a "Business Day"). However, Fund shares cannot be purchased
by Federal Reserve wire on Federal holidays on which wire transfers are
restricted.

Financial institutions and intermediaries may purchase shares by placing orders
with the Funds' Transfer Agent (or its authorized agent). Institutions and
intermediaries that use certain SEI proprietary systems may place orders
electronically through those systems. Cash investments must be transmitted or
delivered in federal funds to the Funds' wire agent by the close of business on
the day after the order is placed. The Funds may reject any purchase order if
they determine that accepting the order would not be in the best interests of
the Funds or their shareholders.

When you purchase or sell Fund shares through certain financial institutions
(rather than directly from the Funds), you may have to transmit your purchase
and sale requests to your financial institution at an earlier time for your
transaction to become effective that day. This allows your financial institution
time to process your requests and transmit them to the Funds.

Certain other intermediaries, including certain broker-dealers and shareholder
organizations, are authorized to accept purchase, redemption and exchange
requests for Fund shares. These requests are normally executed at the net asset
value per share ("NAV") next determined after the intermediary receives the
request. These authorized intermediaries are responsible for transmitting
requests and delivering funds on a timely basis.

Investors who deal directly with a financial institution or financial
intermediary will have to follow the institution's or intermediary's procedures
for transacting with the Funds. For more information about how to purchase or
sell Fund shares through your financial institution, you should contact your
financial institution directly. Investors may be charged a fee for purchase
and/or redemption transactions effectuated through certain of these
broker-dealers or other financial intermediaries.

The California Tax Exempt and Institutional Tax-Free Funds' NAV is calculated
once each Business Day at 2:00 p.m. and 3:00 p.m., Eastern time, respectively.
So, for you to be eligible to receive dividends declared on the day you submit
your purchase order, generally the Funds (or their authorized intermediaries)
must receive your purchase order and federal funds (readily available funds)
before the Funds calculate their NAV.

HOW THE FUNDS CALCULATE NAV

NAV for one Fund share is the value of that share's portion of all of the net
assets in the Fund.

The Funds value their securities by utilizing the amortized cost valuation
method (as described in the SAI). If a Fund thinks amortized cost is unreliable,
fair value prices may be determined in good faith using methods approved by the
Board of Trustees. The Funds expect their NAV to remain constant at $1.00 per
share, although there is no guarantee that the Fund can accomplish this.
<PAGE>
8 PROSPECTUS

PURCHASING AND SELLING FUND SHARES

HOW TO SELL YOUR FUND SHARES

If you hold Class C Shares, you may sell your shares on any Business Day by
following the procedures established when you opened your account or accounts
with your financial institution or intermediary. You may also sell your shares
by contacting your financial institution or financial intermediary by telephone.
Your financial institution or intermediary may charge you a fee for its
services. Generally, the California Tax Exempt Fund and Institutional Tax Free
Fund must receive your redemption request before 2:00 p.m. and 1:30 p.m. Eastern
time, respectively. The sale price of each share will be the next NAV determined
after the Funds (or their authorized intermediaries) receive your request.

RECEIVING YOUR MONEY

Normally, the Funds will make payment on your sale the following Business Day
after they receive your request, but it may take up to seven days. Your proceeds
will be wired to your bank account.

REDEMPTIONS IN KIND

The Funds generally pay sale (redemption) proceeds in cash. However, under
unusual conditions that make the payment of cash unwise (and for the protection
of the Funds' remaining shareholders) the Funds might pay all or part of your
redemption proceeds in liquid securities with a market value equal to the
redemption price (redemption in kind). It is highly unlikely that your shares
would ever be redeemed in kind, but if they were, you might have to pay
transaction costs to sell the securities distributed to you, as well as taxes on
any capital gains from the sale of your shares as with any redemption.

SUSPENSION OF YOUR RIGHT TO SELL YOUR SHARES

The Funds may suspend your right to sell your shares if the NYSE restricts
trading, the SEC declares an emergency or for other reasons. More information
about this is in the SAI.

TELEPHONE TRANSACTIONS

Purchasing and selling Fund shares over the telephone is extremely convenient,
but not without risk. Although the Funds have certain safeguards and procedures
to confirm the identity of callers and the authenticity of instructions, the
Funds are not responsible for any losses or costs incurred by following
telephone instructions the Funds reasonably believe to be genuine. If you or
your financial institution transact with the Funds over the telephone, you will
generally bear the risk of any loss.

DISTRIBUTION OF FUND SHARES

SEI Investments Distribution Co. ("SIDCo.") is the distributor of the shares of
the Funds. SIDCo. receives no compensation for distributing the Funds' Class C
Shares.

For Class C Shares, shareholder servicing fees and administrative service fees,
as a percentage of average daily net assets, may each be up to 0.25%.
<PAGE>
PROSPECTUS 9

DIVIDENDS, DISTRIBUTIONS AND TAXES

DIVIDENDS AND DISTRIBUTIONS

The Funds declare dividends daily and distributes its income monthly. The Funds
make distributions of capital gains, if any, at least annually.

You will receive dividends and distributions in the form of cash unless
otherwise stated.

TAXES

PLEASE CONSULT YOUR TAX ADVISOR REGARDING YOUR SPECIFIC QUESTIONS ABOUT FEDERAL,
STATE AND LOCAL INCOME TAXES. Below, the Funds have summarized some important
tax issues that affect the Funds and their shareholders. This summary is based
on current tax laws, which may change.

The Funds will distribute substantially all of their income and capital gains,
if any. The dividends and distributions you receive may be subject to Federal,
state and local taxation, depending upon your tax situation. If so, they are
taxable whether or not you reinvest them. Income distributions are generally
taxable at ordinary interest rates. Capital gains distributions are generally
taxable at the rates applicable to long-term capital gains. EACH SALE OF FUND
SHARES IS A TAXABLE EVENT.

The Funds intend to distribute federally tax-exempt income. The Funds also
intend to distribute income that is exempt from California state and local
income taxes. The Funds may invest a portion of their assets in securities that
generate income that is subject to Federal or state income taxes. Income exempt
from Federal tax may be subject to state and local taxes. Any capital gains
distributed by the Funds may be taxable.

The Funds are not liable for any income or franchise taxes in the Commonwealth
of Massachusetts as long as they qualify as a regulated investment company under
Federal tax law.

MORE INFORMATION ABOUT TAXES IS IN THE FUNDS' SAI.
<PAGE>
10 PROSPECTUS

FINANCIAL HIGHLIGHTS

The table that follows presents performance information about Class C Shares of
the Institutional Tax Free Fund. This information is intended to help you
understand the Fund's financial performance for the past five years, or, if
shorter, the period of the Fund's operations. Some of this information reflects
financial information for a single Fund share. The total returns in the table
represent the rate that you would have earned (or lost) on an investment in the
Fund, assuming you reinvested all of your dividends and distributions.

This information has been audited by Arthur Andersen LLP, independent public
accountants. Their report, along with the Fund's financial statements, appears
in the Fund's annual report that accompanies the SAI. You can obtain the annual
report, which contains more performance information, at no charge by calling
1-800-DIAL-SEI.

SEI TAX EXEMPT TRUST -- FOR THE YEARS ENDED DECEMBER 31
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>

NET REALIZED
AND
INVESTMENT UNREALIZED
NET ASSET ACTIVITIES DISTRIBUTIONS GAIN (LOSS) ON
VALUE, NET NET NET INVESTMENTS
BEGINNING INVESTMENT INVESTMENT REALIZED TOTAL AND CAPITAL
OF PERIOD INCOME INCOME GAIN DISTRIBUTIONS TRANSACTIONS
--------- ---------- ---------- --------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
----------------------------
INSTITUTIONAL TAX FREE FUND
------------------------
CLASS C
1999........................... $ 1.00 $ 0.025 $ (0.025) -- $ (0.025) --
1998........................... 1.00 0.029 (0.029) -- (0.029) --
1997........................... 1.00 0.029 (0.029) -- (0.029) --
1996(1)........................ 1.00 0.029 (0.029) -- (0.029) --

<CAPTION>
RATIO OF
RATIO NET
OF INVESTMENT
NET EXPENSES RATIO OF INCOME TO
ASSET NET TO AVERAGE NET AVERAGE
VALUE, ASSETS, RATIO OF NET ASSETS INVESTMENT NET ASSETS
END END EXPENSES EXCLUDING INCOME TO EXCLUDING
OF TOTAL OF PERIOD TO AVERAGE FEE AVERAGE FEE
PERIOD RETURN (000) NET ASSETS WAIVERS NET ASSETS WAIVERS
------ ------ --------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
----------------------------
INSTITUTIONAL TAX FREE FUND
------------------------
CLASS C
1999........................... $1.00 2.57% $ 38,022 0.83% 0.93% 2.52% 2.42%
1998........................... 1.00 2.94 22,676 0.83 0.93 2.89 2.79
1997........................... 1.00 2.93 9,382 0.83 0.95 2.85 2.73
1996(1)........................ 1.00 2.92 19,208 0.83* 0.96* 2.89* 2.76*
</TABLE>

Amounts designated as "--" are either $0 or have been rounded to $0.
* Annualized.
(1) The Institutional Tax Free Fund--Class C commenced operations on September
11, 1995.

<PAGE>

SEI INVESTMENTS

The Art of People. The Science of Results.

More information about the Funds is available without charge through the
following:

STATEMENT OF ADDITIONAL INFORMATION (SAI)

The SAI dated December 31, 1999, includes more detailed information about SEI
Tax Exempt Trust. The SAI is on file with the SEC and is incorporated by
reference into this prospectus. This means that the SAI, for legal purposes,
is part of this prospectus.

ANNUAL AND SEMI-ANNUAL REPORTS

These reports typically list the Funds' holdings and contain information from
the Funds' managers about fund strategies and market conditions and trends.
The reports also contain detailed financial information about the Funds.

TO OBTAIN MORE INFORMATION:
By Telephone: Call 1-8OO-DIAL-SEI
By Mail: Write to the Fund at:
One Freedom Valley Drive
Oaks, PA 19456

By Internet: http://www.seic.com

From the SEC: You can obtain the SAI or the Annual and Semi-Annual Reports,
as well as other information about the SEI Tax Exempt Trust, from the EDGAR
Database on the SEC's website (http://www.sec.gov). You may review and copy
documents at the SEC Public Reference Room in Washington, DC (for information
on the operation of the Public Reference Room, call 1-202-942-8090). You may
request documents by mail from the SEC, upon payment of a duplicating fee, by
writing to: Securities and Exchange Commission, Public Reference Section,
Washington, DC 20549-0102. You may also obtain this information, upon payment
of a duplicating fee, by e-mailing the SEC at the following address:
[email protected].

The Trust's Investment Company Act registration number is 811-3447.

INV-385

PROSPECTUS AS OF MAY 31, 2000

MONEY
MARKET

Institutional
Tax Free Fund
California
Tax Exempt Fund
Class C

The Securities Exchange Commission has not approved or disapproved the
Securities or passed upon the accuracy of this prospectus. Any
representation to the contrary is a criminal offense.