This book documents the scientific outcome and constitutes the final report of the Japanese reseach project on discovery science. During three years more than 60 scientists participated in the project and developed a wealth of new methods for knowledge discovery and data mining. The 52 revised full papers presented were carefully reviewed and span the whole range of knowledge discovery from logical foundations and inductive reasoning to statistical inference and computational learning. A broad variety of advanced applications are presented including knowledge discovery and data mining in very large databases, knowledge discovery in network environments, text mining, information extraction, rule mining, Web mining, image processing, and pattern recognition.