An approach to abductive inference developed in the TACITUS project has resulted in a dramatic simplification of how the problem of interpreting texts is conceptualized. Its use in solving the local pragmatics problems of reference, compound nominals, syntactic ambiguity, and metonymy is described and illustrated. It also suggests an elegant and thorough integration of syntax, semantics, and pragmatics. 1

We are able to understand language so well because we know so much. When we read the sentence (1) John drove down the street in a car. we know immediately that the driving and hence John are in the car and that the street isn't. We attach the prepositional phrase to the verb \drove " rather than to the noun \street". This is not syntactic knowledge, because in the syntactically similar sentence (2) John drove down a street in Chicago. it is the street that is in Chicago. Therefore, a large part of the study of language should be an investigation of the question of how we use our knowledge of the world to understand discourse. This question has been examined primarily by researchers in the eld of articial intelligence (AI), in part because they have been interested in linking language with actual behavior in specic situations, which has led them to an attempt to represent and reason about fairly complex world knowledge. In this chapter I describe how a particular kind of reasoning, called abduction, pro-