AMENDED AND RESTATED SUPPLEMENT DATED AUGUST 17, 2005 TO GMO TRUST
                      - CLASS M SHARES PROSPECTUS DATED JUNE 30, 2005

Management of the Trust

Effective  August 31, 2005, the GMO U.S. Active Division will merge into the
GMO U.S.  Quantitative  Division.   This  change  will  not  affect  the
day-to-day management of the Funds within these divisions.

The last row of the table on page 31 of the  Prospectus  is hereby  amended  and
restated as follows:



         FUND                SENIOR MEMBER           PRINCIPAL OCCUPATION DURING PAST 5
                            (LENGTH OF SERVICE)               YEARS
- ---------------------------------------------------------------------------------------
                                              
Emerging Countries Fund      Arjun Divecha          Director of GMO's Emerging Markets
                             (since 1993)           Division since 1993.


                                    GMO TRUST

            AMENDED AND RESTATED SUPPLEMENT DATED AUGUST 17, 2005 TO
                  GMO TRUST PROSPECTUS DATED JUNE 30, 2005 AND
       GMO TRUST STATEMENT OF ADDITIONAL INFORMATION DATED JUNE 30, 2005

Minimum Investment Criteria for Class III Eligibility - GMO Developed World
Stock Fund and GMO Global Growth Fund

Notwithstanding references to the contrary in the table captioned "Minimum
Investment Criteria for Class II and Class III Eligibility" on page 101 of the
Prospectus, the Minimum Total Investment required to purchase Class III Shares
of GMO Developed World Stock Fund and GMO Global Growth Fund is $5 million.

GMO Small Cap Value Fund, GMO Small Cap Growth Fund, and GMO Tax-Managed Small
Companies Fund

The Board of Trustees of GMO Trust has approved the following changes, effective
August 31, 2005, to the Funds' names:



             Current Name                       Name as of August 31, 2005
             ------------                       --------------------------
                                         
GMO Small Cap Value Fund                    GMO Small/Mid Cap Value Fund
GMO Small Cap Growth Fund                   GMO Small/Mid Cap Growth Fund
GMO Tax-Managed Small Companies Fund        GMO Tax-Managed Small/Mid Cap Fund



In connection with the Funds' name changes, effective August 31, 2005, the first
paragraph of each Fund's "Principal investment strategies" is amended and
restated to read as follows:

GMO Small/Mid Cap Value Fund

The Fund typically makes equity investments in U.S. companies that issue stocks
included in the Russell 2500 Index and in companies with similar market
capitalizations ("small and mid cap companies"). As of May 31, 2005, the market
capitalization of companies that issue stocks included in the Russell 2500
Index, a U.S. stock index, ranged from $20 million to $8 billion. In addition,
as of May 31, 2005, the average market capitalization of companies that issue
stocks included in the Russell 2500 Index was approximately $2.4 billion and the
median market capitalization was approximately $690 million. Under normal
circumstances, the Fund invests at least 80% of its assets in investments in
small and mid cap companies.

GMO Small/Mid Cap Growth Fund

The Fund typically makes equity investments in U.S. companies that issue stocks
included in the Russell 2500 Index and in companies with similar market
capitalizations ("small and mid cap companies"). As of May 31, 2005, the market
capitalization of companies that issue stocks included in the Russell 2500
Index, a U.S. stock index, ranged from $20 million to $8 billion. In addition,
as of May 31, 2005, the average market capitalization of companies that issue
stocks included in the Russell 2500 Index was approximately $2.4 billion and the
median market capitalization was approximately $690 million. Under normal
circumstances, the Fund invests at least 80% of its assets in investments in
small and mid cap companies.

GMO Tax-Managed Small/Mid Cap Fund

The Fund typically makes equity investments in small and mid cap companies that
issue stocks traded in the U.S. market and uses quantitative models integrated
with tax management techniques to provide investors subject to U.S. federal
income tax exposure to the U.S. small and mid cap company equity market. The
Manager considers





"small and mid cap companies" to be those chosen from among the 3,000 largest
capitalized companies, excluding the top 500, with stocks traded in the U.S.
market. Under normal circumstances, the Fund invests at least 80% of its assets
in investments in small and mid cap companies.

GMO Global Growth Fund

On page 31 of the Prospectus, under the caption "Fees and expenses", the heading
that references "Class IV" in the "Annual Fund operating expenses" table should
reference "Class III", which is the only class of shares the Fund currently
offers.

GMO Domestic Bond Fund

On page 51 of the Prospectus, under the caption "Fees and expenses - Annual Fund
operating expenses", the "Net annual expenses" for the Fund's Class VI shares
should be "0.16%."

GMO Developed World Stock Fund

On the inside back cover of the Prospectus, the Cusip number for the Fund's
Class III shares should be "362013 20 3."

Management of the Trust

Effective August 31, 2005, the GMO U.S. Active Division will merge into the GMO
U.S. Quantitative Division. This change will not affect the day-to-day
management of the Funds within these divisions.