This volume contains the proceedings of the International Workshop on Operator Theory and Applications held at the University of Algarve in Faro, Portugal, September 12-15, in the year 2000. The main topics of the conference were !> Factorization Theory; !> Factorization and Integrable Systems; !> Operator Theoretical Methods in Diffraction Theory; !> Algebraic Techniques in Operator Theory; !> Applications to Mathematical Physics and Related Topics. A total of 94 colleagues from 21 countries participated in the conference. The major part of participants came from Portugal (32), Germany (17), Israel (6), Mexico (6), the Netherlands (5), USA (4) and Austria (4). The others were from Ukraine, Venezuela (3 each), Spain, Sweden (2 each), Algeria, Australia, Belorussia, France, Georgia, Italy, Japan, Kuwait, Russia and Turkey (one of each country). It was the 12th meeting in the framework of the IWOTA conferences which started in 1981 on an initiative of Professors 1. Gohberg (Tel Aviv) and J. W. Helton (San Diego). Up to now, it was the largest conference in the field of Operator Theory in Portugal.