A brief review is given of the theory of magnetic reconnection in three dimensions. The key elements of a three-dimensional null point are its spine and its fan, which consist, respectively, of a field line and a surface of field lines that pass through the null, The fans of two nulls intersect in general in a field line called a separator that joins the nulls. Several different types of reconnection have been proposed. namely: spine reconnection, fan reconnection, separator reconnection and quasi-separatrix layer reconnection. In addition, a new exact solution for reconnective annihilation has been recently discovered. A summary is also given of the impressive evidence of reconnection at work on the Sun provided by a range of observations from the Yohkoh and SOHO satellites, both of solar flares and of coronal heating events.