This book constitutes the refereed proceedings of the Third International Colloquium on Grammatical Inference, ICGI-96, held in Montpellier, France, in September 1996. The 25 revised full papers contained in the book together with two invited key papers by Magerman and Knuutila were carefully selected for presentation at the conference. The papers are organized in sections on algebraic methods and algorithms, natural language and pattern recognition, inference and stochastic models, incremental methods and inductive logic programming, and operational issues.