Background: This study identifies the diagnostic errors leading to misdiagnosis of 3rd nerve palsy and to aid clinicians in making this diagnosis. The objective of this article is to determine the incidence of misdiagnosis of 3rd cranial nerve palsy (3rd nerve palsy) among providers referring to a tertiary care neuro-ophthalmology clinic and to characterize diagnostic errors that led to an incorrect diagnosis., Methods: This was a retrospective clinic-based multicenter cross-sectional study of office encounters at 2 institutions from January 1, 2014, to January 1, 2017. All encounters with scheduling comments containing variations of "3rd nerve palsy" were reviewed. Patients with a documented referral diagnosis of new 3rd nerve palsy were included in the study. Examination findings, including extraocular movement examination, external lid examination, and pupil examination, were collected. The final diagnosis was determined by a neuro-ophthalmologist. The Diagnosis Error Evaluation and Research (DEER) taxonomy tool was used to categorize the causes of misdiagnosis. Seventy-eight patients referred were for a new diagnosis of 3rd nerve palsy. The main outcome measure was the type of diagnostic error that led to incorrect diagnoses using the DEER criteria as determined by 2 independent reviewers. Secondary outcomes were rates of misdiagnosis, misdiagnosis rate by referring specialty, and examination findings associated with incorrect diagnoses., Results: Of 78 patients referred with a suspected diagnosis of 3rd nerve palsy, 21.8% were determined to have an alternate diagnosis. The most common error in misdiagnosed cases was failure to correctly interpret the physical examination. Ophthalmologists were the most common referring provider for 3rd nerve palsy, and optometrists had the highest overdiagnosis rate of 3rd nerve palsy., Conclusions: Misdiagnosis of 3rd nerve palsy was common. Performance and interpretation of the physical examination were the most common factors leading to misdiagnosis of 3rd nerve palsy., Competing Interests: The authors report no conflicts of interest., (Copyright © 2020 by North American Neuro-Ophthalmology Society.)