N-CSRS/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES

Investment Company Act
file number
811-08110

SPECIAL SITUATIONS FUND III, L.P.
(Exact name of registrant as specified in charter)

153 EAST 53RD STREET, 55TH FLOOR, NEW YORK, NEW
YORK
10022
(Address of principal executive offices)
(Zip code)

Allen Levithan, Esq.
Lowenstein Sandler, PC
65 Livingston Avenue
Rosedale, NJ  07068-1791
(Name and address of agent for service)

Registrant?s telephone number,
including area code
(212) 207-6500

Date of fiscal
year end:
DECEMBER 31, 2004

Date of reporting
period:
JUNE 30, 2004


Form N-CSR is to be used by management investment companies to
file reports with the Commission not later than 10 days after
the transmission to stockholders of any report that is required
to be transmitted to stockholders under Rule 30e-1 under the
Investment Company Act of 1940 (17 CFR 270.30e-1).  The
Commission may use the information provided on Form N-CSR in its
regulatory, disclosure review, inspection, and policymaking
roles.

A registrant is required to disclose the information specified
by Form N-CSR, and the Commission will make this information
public.  A registrant is not required to respond to the
collection of information contained in Form N-CSR unless the
Form displays a currently valid Office of Management and Budget
("OMB") control number.  Please direct comments concerning the
accuracy of the information collection burden estimate and any
suggestions for reducing the burden to Secretary, Securities and
Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-
0609.  The OMB has reviewed this collection of information under
the clearance requirements of 44 U.S.C. ? 3507.


Item 1.		Reports to Stockholders.









Item 2.		Code of Ethics.

Not applicable at this time.

Item 3.		Audit Committee Financial Expert.

Not applicable at this time.

Item 4.		Principal Accountant Fees and Services.

Not applicable at this time.

Item 5.		Audit Committee of Listed Registrants.

Not applicable.

Item 6.		[Reserved]

Item 7.	Disclosure of Proxy Voting Policies and Procedures for
Closed-End Management Investment Companies

Not applicable at this time.

Item 8.	[Reserved]

Item 9.	Controls and Procedures.

(a)	Based on an evaluation of the registrant's disclosure
controls and procedures as of a date within 90 days of the
filing date of this report, the registrant?s principal executive
and principal financial officers, or persons performing similar
functions, concluded that the disclosure controls and procedures
are effective.

(b)	There were no significant changes in the registrant's
internal control over financial reporting that occurred during
the registrant's last fiscal half-year that have materially
affected, or are reasonably likely to materially affect, the
registrant's internal control over financial reporting.

Item 10.	Exhibits.

(a)(1)	NOT APPLICABLE.

(a)(2)	CERTIFICATIONS REQUIRED BY ITEM 10(a)(2) OF FORM N-
CSR ARE FILED HEREWITH AS EX-99.CERT.

(b)	CERTIFICATIONS REQUIRED BY ITEM 10(b) OF FORM N-CSR ARE
FILED HEREWITH AS EX-99.906CERT.

SIGNATURES

	Pursuant to the requirements of the Securities Exchange Act
of 1934 and the Investment Company Act of 1940, the registrant
has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

SPECIAL SITUATIONS FUND III, L.P.

By:	__/s/ Austin Marxe_______________
	Austin Marxe, Principal Executive Officer

Date: January 12, 2004


	Pursuant to the requirements of the Securities Exchange
Act of 1934 and the Investment Company Act of 1940, this report
has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

By:	_/s/ Austin Marxe_______________________
	Austin Marxe, Principal Executive Officer

Date January 12, 2004

By:	__/s/Rose M. Carling  ______________
	Rose M. Carling, Principal Financial Officer

Date January 12, 2004





4
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01/12/2004 1479168.02
EX-99.906CERT

EX-99.906CERT

EX-99.CERT

CERTIFICATION

I, Austin Marxe, certify that:

1.  I have reviewed this report on Form N-CSR of Special
Situations Fund III, L.P.;

2.  Based on my knowledge, this report does not contain any
untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in
light of the circumstances under which such statements were
made, not misleading with respect to the period covered by
this report;

3.  Based on my knowledge, the financial statements, and
other financial information included in this report, fairly
present in all material respects the financial condition,
results of operations, changes in net assets, and cash
flows (if the financial statements are required to include
a statement of cash flows) of the registrant as of, and
for, the periods presented in this report;

4.  The registrant's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Rule 30a-3(c) under
the Investment Company Act of 1940) for the registrant and
have:

           (a)	Designed such disclosure controls and
procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the
period in which this report is being prepared;

           (b)	Evaluated the effectiveness of the
registrant's disclosure controls and procedures and
presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as
of a date within 90 days prior to the filing date of this
report based on such evaluation; and

           (c)	Disclosed in this report any change in
the registrant's internal control over financial reporting
that occurred during the registrant's most recent fiscal
half-year (the registrant's second fiscal half-year in the
case of an annual report) that has materially affected, or
is reasonably likely to materially affect, the registrant's
internal control over financial reporting; and

5.  The registrant's other certifying officer(s) and I have
disclosed to the registrant's auditors and the audit
committee of the registrant's board of directors (or
persons performing the equivalent functions):

           (a)	all significant deficiencies and
material weaknesses in the design or operation of internal
control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to
record, process, summarize, and report financial
information; and

           (b)	any fraud, whether or not material, that
involves management or other employees who have a
significant role in the registrant's internal control over
financial reporting.


Date:  August 25, 2004			_/s/Austin
Marxe__________________
					Austin Marxe, Principal
Executive Officer

CERTIFICATION

I, Rose M. Carling, certify that:

1.  I have reviewed this report on Form N-CSR of Special
Situations Fund III, L.P.;

2.  Based on my knowledge, this report does not contain any
untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in
light of the circumstances under which such statements were
made, not misleading with respect to the period covered by
this report;

3.  Based on my knowledge, the financial statements, and
other financial information included in this report, fairly
present in all material respects the financial condition,
results of operations, changes in net assets, and cash
flows (if the financial statements are required to include
a statement of cash flows) of the registrant as of, and
for, the periods presented in this report;

4.  The registrant's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Rule 30a-3(c) under
the Investment Company Act of 1940) for the registrant and
have:

           (a)	Designed such disclosure controls and
procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the
period in which this report is being prepared;

           (b)	Evaluated the effectiveness of the
registrant's disclosure controls and procedures and
presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as
of a date within 90 days prior to the filing date of this
report based on such evaluation; and

           (c)	Disclosed in this report any change in
the registrant's internal control over financial reporting
that occurred during the registrant's most recent fiscal
half-year (the registrant's second fiscal half-year in the
case of an annual report) that has materially affected, or
is reasonably likely to materially affect, the registrant's
internal control over financial reporting; and

5.  The registrant's other certifying officer(s) and I have
disclosed to the registrant's auditors and the audit
committee of the registrant's board of directors (or
persons performing the equivalent functions):

           (a)	all significant deficiencies and
material weaknesses in the design or operation of internal
control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to
record, process, summarize, and report financial
information; and

           (b)	any fraud, whether or not material, that
involves management or other employees who have a
significant role in the registrant's internal control over
financial reporting.


Date:  August 25, 2004			/s/Rose M. Carling
					Rose M. Carling, Principal
Financial Officer

EX-99.906 CERT

CERTIFICATION
Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002


	The undersigned, Principal Executive Officer of Special
Situations Fund III, L.P. (the "Registrant"), with respect to
the Registrant's Form N-CSR for the period ended June 30, 2003
as filed with the Securities and Exchange Commission, hereby
certifies, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

	1.	such Form N-CSR fully complies with the requirements
of section 13(a) or 15(d) of the Securities Exchange Act of
1934; and

	2.	the information contained in such Form N-CSR fairly
presents, in all material respects, the financial condition and
results of operations of the Registrant.


Dated: August 25, 2004			___/s/Austin
Marxe_______________
					Austin Marxe, Principal Executive
Officer


A signed original of this written statement required by Section
906 of the Sarbanes-Oxley Act of 2002 has been provided to the
Registrant and will be retained by the Registrant and furnished
to the Securities and Exchange Commission (the "Commission") or
its staff upon request.

This certification is being furnished to the Commission solely
pursuant to 18 U.S.C. Section 1350 and is not being filed as
part of the Form N-CSR filed with the Commission.


CERTIFICATION
Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002


The undersigned, Principal Financial Officer of Special
Situations Fund III, L.P. (the "Registrant"), with respect to
the Registrant's Form N-CSR for the period ended June 30, 2003
as filed with the Securities and Exchange Commission, hereby
certifies, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

	1.	such Form N-CSR fully complies with the requirements
of section 13(a) or 15(d) of the Securities Exchange Act of
1934; and

	2.	the information contained in such Form N-CSR fairly
presents, in all material respects, the financial condition and
results of operations of the Registrant.


Dated: August 25, 2004		_/s/ Rose M.
Carling________________
					Rose M. Carling, Principal Financial
Officer


A signed original of this written statement required by Section
906 of the Sarbanes-Oxley Act of 2002 has been provided to the
Registrant and will be retained by the Registrant and furnished
to the Securities and Exchange Commission (the "Commission") or
its staff upon request.

This certification is being furnished to the Commission solely
pursuant to 18 U.S.C. Section 1350 and is not being filed as
part of the Form N-CSR filed with the Commission.



EX-99.906CERT

EX-99.906CERT