The Third Crusade was in favour of the Muslims. As a result of the fail Second Crusade, the Muslims where able to regroup. Zangi died in 1146, but his successor, Nur ad-Din (1118-1174), expanded his realm into a major power in the Middle East. In 1169 his forces, under the command of Saladin, took over Egypt. Nur ad-Din died five years later and Saladin succeeded him as rulse of a Muslim state.

The land owned was so fast that it surrounded Crusader states on three fronts. In 1180 Saladin invaded the kingdom of Jerusalem defeating the Latin army at Hattin. Saladin then decisively swept through most of the Crusader stongholds in Jerusalem. The city itself surrendered to him in October 1180-1185. There was only one major city that still remained in Crusader control. Relizing the need for more support Pope Gregory VIII proclaimed the Third Crusade which resulted in three major monarchs enlisting and a force of about 100,000 Crusaders.

The three major European monarchs that enlisted in its ranks were the Holy Roman emperor, Frederick I Barbarossa, the French king, Philip II Augustus, and the English king, Richard I Lion-Heart. Asthough the there were many men, the effect it had in the third Crusade was minor. The Crusaders never recaptured Jerusalem or the other cities they lost to the Muslims. They did manage to take coastal cities, but they were much weaker militarly and ecnomically than the old cities.