The electronic structure of a charge density wave (CDW) system PrTe3 and its modulated structure in the CDW phase have been investigated by employing ARPES, XAS, Pr 4 f RPES, and first-principles band structure calculation. Pr ions are found to be nearly trivalent, supporting the CDW instability in the metallic Te sheets through partial filling. Finite Pr 4 f spectral weight is observed near the Fermi level, suggesting the non-negligible Pr 4 f contribution to the CDW formation through the Pr 4 f-Te 5p hybridization. The two-fold symmetric features in the measured Fermi surface (FS) of PrTe3 are explained by the calculated FS for the assumed 7 × 1 CDW supercell formation in Te sheets. The shadow bands and the corresponding very weak FSs are observed, which originate from both the band folding due to the 3D interaction of Te sheets with neighboring Pr-Te layers and that due to the CDW-induced FS reconstruction. The straight vertical FSs are observed along kz, demonstrating the nearly 2D character for the near-EF states. The observed linear dichroism reveals the in-plane orbital character of the near-EF Te 5p states.