The goal of this work is to develop a semantic framework to underpin the development of natural language (NL) interfaces for 3 Dimensional (3-D) simulated environments. The thesis of this work is that the computational interpretation of language in such environments should be based on a framework that integrates a model of visual perception with a model of discourse. When interacting with a 3-D environment, users have two main goals the first is to move around in the simulated environment and the second is to manipulate objects in the environment. In order to interact with an object through language, users need to be able to refer to the object. There are many different types of referring expressions including definite descriptions, pronominals, demonstratives, one-anaphora, other-expressions, and locative-expressions Some of these expressions are anaphoric (e g , pronominals, oneanaphora, other-expressions). In order to computationally interpret these, it is necessary to develop, and implement, a discourse model. Interpreting locative expressions requires a semantic model for prepositions and a mechanism for selecting the user’s intended frame of reference. Finally, many of these expressions presuppose a visual context. In order to interpret them this context must be modelled and utilised. This thesis develops a perceptually grounded discourse-based computational model of reference resolution capable of handling anaphoric and locative expressions. There are three novel contributions in this framework a visual saliency algorithm, a semantic model for locative expressions containing projective prepositions, and a discourse model. The visual saliency algorithm grades the prominence of the objects in the user's view volume at each frame. This algorithm is based on the assumption that objects which are larger and more central to the user's view are more prominent than objects which are smaller or on the periphery of their view. The resulting saliency ratings for each frame are stored in a data structure linked to the NL system’s context model. This approach gives the system a visual memory that may be drawn upon in order to resolve references. The semantic model for locative expressions defines a computational algorithm for interpreting locatives that contain a projective preposition. Specifically, the prepositions in front of behind, to the right of, and to the left of. There are several novel components within this model. First, there is a procedure for handling the issue of frame of reference selection. Second, there is an algorithm for modelling the spatial templates of projective prepositions. This algonthm integrates a topological model with visual perceptual cues. This approach allows us to correctly define the regions described by projective preposition in the viewer-centred frame of reference, in situations that previous models (Yamada 1993, Gapp 1994a, Olivier et al 1994, Fuhr et al 1998) have found problematic. Thirdly, the abstraction used to represent the candidate trajectors of a locative expression ensures that each candidate is ascribed the highest rating possible. This approach guarantees that the candidate trajector that occupies the location with the highest applicability in the prepositions spatial template is selected as the locative’s referent. The context model extends the work of Salmon-Alt and Romary (2001) by integrating the perceptual information created by the visual saliency algonthm with a model of discourse. Moreover, the context model defines an interpretation process that provides an explicit account of how the visual and linguistic information sources are utilised when attributing a referent to a nominal expression. It is important to note that the context model provides the set of candidate referents and candidate trajectors for the locative expression interpretation algorithm. These are restncted to those objects that the user has seen. The thesis shows that visual salience provides a qualitative control in NL interpretation for 3-D simulated environments and captures interesting and significant effects such as graded judgments. Moreover, it provides an account for how object occlusion impacts on the semantics of projective prepositions that are canonically aligned with the front-back axis in the viewer-centred frame of reference.