These are the proceedings of CHES 2001, the third Workshop on Cryptographic Hardware and Embedded Systems. The first two CHES Workshops were held in Massachusetts, and this was the first Workshop to be held in Europe. There was a large number of submissions this year, and in response the technical program was extended to 2 1/2 days. As is evident by the papers in these proceedings, many excellent submissions were made. Selecting the papers for this year’s CHES was not an easy task, and we regret that we had to reject several very intersting papers due to the ac l kof time. There were 66 submitted contributions this year, of which 31, or 47%, were selected for presentation. If we look at the number of submitted papers at CHES ’99 (42 papers) and CHES 2001 (51 papers), we observe a steady increase. We interpret this as a continuing need for a workshop series which combines theory and practice for integrating strong security features into modern communications and computer applications. In addition to the submitted contributions, Ross Anderson from Cambridge University, UK, and Adi Shamir from The Weizmann Institute, Israel, gave invited talks. As in previous years, the focus of the workshop is on all aspects of cryp- graphic hardware and embedded system design. Of special interest were cont- butions that describe new methods for efficient hardware implementations and high-speed software for embedded systems, e.g., smart cards, microprocessors, DSPs, etc. CHES also continues to be an important forum for new theoretical and practical findings in the important and growing field of side-channel attacks.