We present here the inversion algorithm implemented by the Laboratoire d'Optique Atmosph¿rique, University of Lille, France, for the analysis of solar and lunar occultation data from the Stratospheric Aerosol and Gas Experiment III (SAGE III). The first flight of SAGE III is planned to be launched in late fall 2000 on the polar orbit spacecraft METEOR 3M. We present first the forward model algorithm for calculating atmospheric transmittances in four of the SAGE III channels: the solar ones, around 440 nm and 600 nm, and the lunar ones, around 413 nm and 660 nm. Then the inversion algorithm is introduced, accomplished in two sequential steps. The first one is the spatial inversion of the simulated slant optical thickness profile leading to the extinction coefficient profile. The second is the spectral inversion of the extinction coefficient at each altitude to separate gas and aerosol contributions. Lastly, error analysis is conducted by a Monte Carlo technique and discussed: the retrieved gas densities and aerosol extinction profiles favourably compare to the corresponding input profiles. ¿ 2000 American Geophysical Union