A description of the IBM 360/65 computer system to be installed at RAND, and a definition of the terms used in third-generation computing. Time is measured in nanoseconds--billionths of a second. The basic storage unit is a byte (8 bits, 1 character). The CPU is 3 times as fast as our old 7044. Twice as much core storage will normally be available to each user, and more commands can be contained in a given amount of core. Most datasets (files) can be permanently mounted on disk packs; disks are random-access, can be read twice as fast as tapes, and avoid rewinding. The change from a 36-bit to a 32-bit word means that single-precision decimal arithmetic decreases from 9 to 7.2 significant digits. Languages available include COBOL, SIMSCRIPT 1.5 and II, PL/I, RPG (Report Program Generator), MARK IV for file maintenance, JCL for job control. There are two FORTRAN compilers: a fast one with excellent diagnostics for debugging, and a slow one that produces efficient code. Multiprogramming with time-slicing makes even I/O-bound jobs like tape sorting economical. It also supports the new interactive RAND Video Graphics System. 11 pp.