Within artificial intelligence, the need to create sophisticated, intelligent behaviour based on common-sense reasoning has long been recognized. Research has demonstrated that formalism for dealing with common sense reasoning require nonmonotonic capabilities where, typically, inferences based on incomplete knowledge need to be revised in light of later information which fills in some of the gaps. This text examines a reasoning technique based on multiple inheritance structures with exceptions (nonmonotonic inheritance structures). Without an adequate nonmonotonic inheritance reasoning technique, such as exceptional inheritance reasoning (or EIR) as proposed in this book, inheritance networks will produce inconsistencies. A number of nonmonotonic properties that enable EIR to subsume existing formalisms, such as default logic and inferential distance ordering, have been included within this reasoning technique. This inheritance formalism has been applied to the two important domains of causal reasoning and analogical reasoning, to demonstrate the conceptual power and expressiveness of the formalism.