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A 3-wheeled All Terrain Vehicle's lateral stability and handling characteristics are due to the combinations of vehicle speed, ground surface, tire type, weight distribution, rider weight transfer, and the solid rear axle. The computer simulation was used to explore the various interactions. Simulation results were compared with field test vehicle data and expert rider observations. A modified two degree of freedom analytical model was also used to predict 3-wheeled ATV lateral stability and handling characteristics. Current and previous research done on ATVs and other 3-wheeled vehicles were used to formulate general handling and lateral stability characteristics. Initial stages of ATV turns are marked by severe understeer until the breakaway limit. It was found that the 3-wheel ATV has natural oversteer characteristics that are masked by the solid rear axle until the breakaway limit.