Predicting the future is a risky game, and can often leave egg on one's face. However when the organizers of the Intelligent Virtual Environments workshop at the European Conference on AI predicted that the field of Intelligent Virtual Agents would grow and mature rapidly, they were not wrong. From this small workshop spawned the successful one on Intelligent Virtual Agents, held in Manchester in 1999. This volume comprises the proceedings of the much larger third workshop held in Madrid, September 10 11, 2001, which successfully achieved the aim of taking a more international focus, bringing...