This volume constitutes the refereed proceedings of the Third International Symposium on Sanskrit Computational Linguistics, held in Hyderabad, India, in January 2009. The 9 revised full papers presented were carefully reviewed and selected from 16 submissions. The papers fall under four broad categories: Four papers deal with the structure of Panini's Astadhyayi. Two of them deal with parsing issues, two with various aspects of machine translation and the last one with the Web concordance of an important Sanskrit text.