This volume contains the text of the five invited papers and 16 selected contributions presented at the third International Workshop on Analogical and Inductive Inference, AII `92, held in Dagstuhl Castle, Germany, October 5-9, 1992. Like the two previous events, AII '92 was intended to bring together representatives from several research communities, in particular, from theoretical computer science, artificial intelligence, and from cognitive sciences. The papers contained in this volume constitute a state-of-the-art report on formal approaches to algorithmic learning, particularly emphasizing aspects of analogical reasoning and inductive inference. Both these areas are currently attracting strong interest: analogical reasoning plays a crucial role in the booming field of case-based reasoning, and, in the fieldof inductive logic programming, there have recently been developed a number of new techniques for inductive inference.