Originally, the medieval Order of Knights Templar (The Poor Fellow-Soldiers of Jesus Christ, or Knights of the Temple) was founded in 1118, following the 1st Crusade, by a small band of knights who pledged themselves to protect pilgrims traveling to Jerusalem. The order was officially dissolved in 1312.
The Freemasons, or "Ancient Free and Accepted Masons," is the world's oldest fraternal organization. Although its origins rest in the stone mason guilds of the medieval period, the fraternal, or "speculative" rather than "operative," masonic lodges began around 1700. Within the next few decades stories arose tying their linage to that of the fabled Knights Templar. These stories were speculative at best, being based mostly on pure fancy. Despite what a few authors have tried to proclaim, there is no known historical evidence linking the original ancient Knights Templar to Freemasonry.
The Masonic Knights Templar degrees began about the middle of the 18th century, most likely in France and spreading to Scotland, England, and elsewhere. (The first recorded Knight Templar conferral in America was that of William Davis in August of 1769 in Boston.) This degree is part of the "appendant bodies" of Freemasonry, typically within the York Rite, so that while all Knights Templar are Freemasons, not all Freemasons are Knights Templar.
The modern Knights Templar make no claim to any direct link with the medieval Templars. Rather, as the Grand Encampment of the United States says:
The Knights Templar is a Christian-oriented fraternal organization based on the ancient organization that was founded in the 11th century. Today, the Knights Templar display their courage and goodwill in different ways than the ancient Templars. Members of the Order today organize fund-raising activities such as breakfasts, dinners, dances and flea markets for the support of Masonic-related youth groups, in addition to raising millions of dollars for charitable purposes.
For more information see:
http://www.knightstemplar.org/faq.html
http://en.wikipedia.org/wiki/Knights_Templar_%28Freemasonry%29
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