This book constitutes the refereed proceedings of the International Conference on Formal and Applied Practical Reasoning, FAPR '96, held in Bonn, Germany, in June 1996. The 51 revised full papers included in the book together with eight posters were carefully selected for presentation at the conference. The book addresses current aspects of the highly interdisciplinary area of practical reasoning in artificial intelligence, philosophy, psychology, linguistics, software engineering, intelligent systems, and industrial applications. Among the topics addressed are user modeling, belief, legal reasoning, argumentation, dialogue logic, default reasoning, analogy, metareasoning, temporal and procedural reasoning, and many others.