QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-6693

Nuveen Select Tax-Free Income Portfolio 3
(Exact name of registrant as specified in charter)

333 West Wacker Drive, Chicago, Illinois 60606
(Address of principal executive offices) (Zip code)

Jessica R. Droeger—Vice President and Secretary
333 West Wacker Drive, Chicago, Illinois 60606
(Name and address of agent for service)

Registrant's telephone number, including area code: 312-917-7700

Date of fiscal year end: 09/30

Date of reporting period: 12/31/04

Form N-Q is to be used by management investment companies, other than small business investment companies registered on Form N-5 (§§ 239.24 and 274.5 of this chapter), to file reports with the Commission, not later than 60 days after the close of the first and third fiscal quarters, pursuant to rule 30b1-5 under the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use the information provided on Form N-Q in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-Q unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

Item 1. Schedule of Investments

Portfolio of Investments (Unaudited)
Nuveen Select Tax-Free Income Portfolio 3 (NXR)
December 31, 2004

	Principal		Optional Call		Market
	Amount (000)	Description	Provisions*	Ratings**	Value

		Alabama - 0.3%

$	500	Marshall County Healthcare Authority, Alabama, Revenue Bonds, Series 2002A, 6.250%, 1/01/22	1/12 at 101.00	A-	$ 548,920

		California - 6.0%

	2,105	Azusa Unified School District, Los Angeles County, California, General Obligation Bonds, Series	7/12 at 100.00	AAA	2,325,962
		2002, 5.375%, 7/01/21 - FSA Insured

	3,350	California Department of Water Resources, Power Supply Revenue Bonds, Series 2002A, 6.000%,	5/12 at 101.00	A2	3,897,055
		5/01/14

	3,000	Golden State Tobacco Securitization Corporation, California, Tobacco Settlement Asset-Backed Bonds,	6/13 at 100.00	BBB	3,004,530
		Series 2003A-1, 6.750%, 6/01/39

	2,000	Golden State Tobacco Securitization Corporation, California, Enhanced Tobacco Settlement	6/05 at 100.00	A-	2,018,620
		Asset-Backed Bonds, Series 2003B, 5.250%, 6/01/16

		Colorado - 5.8%

		Colorado Health Facilities Authority, Revenue Bonds, Catholic Health Initiatives, Series 2002A:
	2,265	5.500%, 3/01/22	3/12 at 100.00	AA***	2,549,778
	1,735	5.500%, 3/01/22	3/12 at 100.00	AA	1,889,242

	2,700	Denver City and County, Colorado, Airport System Revenue Bonds, Series 1991D, 7.750%, 11/15/13	No Opt. Call	A	3,274,560
		(Alternative Minimum Tax)

	3,000	Denver Convention Center Hotel Authority, Colorado, Senior Revenue Bonds, Convention Center Hotel,	12/13 at 100.00	AAA	3,128,100
		Series 2003A, 5.000%, 12/01/24 - XLCA Insured

		Connecticut - 0.1%

	250	Connecticut Health and Educational Facilities Authority, Revenue Bonds, Bridgeport Hospital Issue,	1/05 at 100.00	AAA	250,843
		Series 1992A, 6.625%, 7/01/18 - MBIA Insured

		District of Columbia - 0.2%

	235	District of Columbia, General Obligation Refunding Bonds, Series 1994A-1, 6.500%, 6/01/10 - MBIA	No Opt. Call	AAA	275,281
		Insured

	15	District of Columbia, General Obligation Bonds, Series 1993E, 6.000%, 6/01/13 - MBIA Insured	6/05 at 100.00	AAA	15,204

		Florida - 5.1%

	4,000	JEA, Florida, Subordinate Lien Electric System Revenue Bonds, Series 2002D, 4.625%, 10/01/22	10/07 at 100.00	Aa3	4,019,200

	5,020	JEA St. John's River Power Park System, Florida, Revenue Refunding Bonds, Series 2002-17 Issue 2,	10/11 at 100.00	Aa2	5,376,018
		5.000%, 10/01/18

		Illinois - 20.0%

	1,175	Chicago Metropolitan Housing Development Corporation, Illinois, FHA-Insured Section 8 Housing	1/05 at 100.00	AA	1,184,835
		Development Revenue Refunding Bonds, Series 1992, 6.850%, 7/01/22

	2,550	Chicago, Illinois, FHA-Insured Mortgage Revenue Bonds, Lakeview Towers Project, Series 1992,	6/05 at 100.00	AAA	2,553,953
		6.600%, 12/01/20

	700	Chicago, Illinois, Special Facility Revenue Refunding Bonds, O'Hare International Airport, United	No Opt. Call	N/R	147,000
		Air Lines Inc. Project, Series 2001C, 6.300%, 5/01/16#

	1,930	Illinois Development Finance Authority, Revenue Bonds, Midwestern University, Series 2001B,	5/11 at 101.00	A-	2,092,969
		5.750%, 5/15/16

	1,500	Illinois Health Facilities Authority, Revenue Bonds, Evangelical Hospitals Corporation, Series	No Opt. Call	N/R***	1,844,745
		1992C, 6.250%, 4/15/22

	4,000	Illinois Health Facilities Authority, Revenue Bonds, Franciscan Sisters Healthcare Corporation,	9/06 at 100.00	AAA	4,286,040
		Series 1992B, 6.625%, 9/01/13 (Pre-refunded to 9/01/06) - MBIA Insured

	4,465	Illinois Health Facilities Authority, Remarketed Revenue Bonds, University of Chicago Project,	8/11 at 103.00	Aa1	4,931,682
		Series 1985A, 5.500%, 8/01/20

	2,225	Illinois Health Facilities Authority, Revenue Refunding Bonds, Elmhurst Memorial Healthcare, Series	1/13 at 100.00	A2	2,505,662
		2002, 6.250%, 1/01/17

	620	Illinois Housing Development Authority, Homeowner Mortgage Revenue Bonds, Series 2000D-3, 5.700%,	2/10 at 100.00	AA	663,846
		8/01/17

	5,700	Illinois, Sales Tax Revenue Bonds, First Series 2002, 5.000%, 6/15/22	6/13 at 100.00	AAA	6,007,116

	2,000	Illinois, Sales Tax Revenue Bonds, Series 1997X, 5.600%, 6/15/17	6/07 at 101.00	AAA	2,161,520

	6,000	Metropolitan Pier and Exposition Authority, Illinois, Revenue Refunding Bonds, McCormick Place	6/12 at 101.00	AAA	6,349,500
		Expansion Project, Series 2002B, 5.000%, 6/15/21 - MBIA Insured

	1,300	Schaumburg, Illinois, General Obligation Bonds, Series 2004B, 5.250%, 12/01/34 - FGIC Insured	12/14 at 100.00	AAA	1,381,107

	1,000	Yorkville, Illinois, General Obligation Debt Certificates, Series 2003, 5.000%, 12/15/22 - RAAI	12/11 at 100.00	AA	1,025,950
		Insured

		Indiana - 3.7%

	1,000	Franklin Community Multi-School Building Corporation, Marion County, Indiana, First Mortgage	7/14 at 100.00	AAA	1,059,500
		Revenue Bonds, Series 2004, 5.000%, 7/15/22 - FGIC Insured

	3,500	Indiana Health Facility Financing Authority, Hospital Revenue Bonds, Methodist Hospitals Inc.,	9/11 at 100.00	A+	3,651,655
		Series 2001, 5.375%, 9/15/22

	2,000	Indianapolis Local Public Improvement Bond Bank, Indiana, Waterworks Project, Series 2002A,	7/12 at 100.00	AAA	2,106,300
		5.250%, 7/01/33 - MBIA Insured

		Iowa - 3.0%

		Iowa Tobacco Settlement Authority, Tobacco Settlement Asset-Backed Revenue Bonds, Series 2001B:
	3,500	5.300%, 6/01/25	6/11 at 101.00	BBB	3,091,690
	2,850	5.600%, 6/01/35	6/11 at 101.00	BBB	2,469,611

		Massachusetts - 0.8%

	1,000	Massachusetts Development Finance Agency, Resource Recovery Revenue Bonds, Ogden Haverhill Project,	12/08 at 102.00	BBB	990,120
		Series 1998B, 5.200%, 12/01/13 (Alternative Minimum Tax)

	500	Massachusetts Health and Educational Facilities Authority, Revenue Bonds, Partners HealthCare	7/11 at 101.00	AA-	566,435
		System Inc., Series 2001C, 6.000%, 7/01/17

		Michigan - 4.9%
	4,000	Michigan Housing Development Authority, Single Family Mortgage Revenue Bonds, Series 1996C,	6/06 at 102.00	AA+	4,171,240
		5.950%, 12/01/17

	235	Michigan State Hospital Finance Authority, Revenue Refunding Bonds, Detroit Medical Center	2/05 at 101.00	Ba3	230,615
		Obligated Group, Series 1993A, 6.500%, 8/15/18

	2,900	Michigan State Hospital Finance Authority, Revenue Refunding Bonds, Trinity Health Credit Group,	12/12 at 100.00	AA-	3,003,791
		Series 2002C, 5.375%, 12/01/30

	1,600	Plymouth-Canton Community School District, Wayne and Washtenaw Counties, Michigan, Unlimited Tax	5/09 at 100.00	AA+	1,677,328
		General Obligation School Building and Site Bonds, Series 1999, 4.750%, 5/01/18

		Mississippi - 0.4%

	725	Mississippi Hospital Equipment and Facilities Authority, Revenue Bonds, Baptist Memorial	9/14 at 100.00	N/R	733,156
		Healthcare, Series 2004B-1, 5.000%, 9/01/24

		Nebraska - 1.9%

	3,500	Nebraska Public Power District, General Revenue Bonds, Series 2002B, 5.000%, 1/01/33 - AMBAC	1/13 at 100.00	AAA	3,582,250
		Insured

		Nevada - 4.9%

	4,000	Director of Nevada State Department of Business and Industry, Revenue Bonds, Las Vegas Monorail	1/10 at 100.00	AAA	4,148,800
		Project, First Tier, Series 2000, 5.375%, 1/01/40 - AMBAC Insured

	4,510	Reno, Nevada, Capital Improvement Revenue Bonds, Series 2002, 5.500%, 6/01/22 - FGIC Insured	6/12 at 100.00	AAA	5,004,431

		New Hampshire - 0.5%

	930	New Hampshire Housing Finance Agency, Single Family Mortgage Acquisition Bonds, Series 2001A,	5/11 at 100.00	Aa2	941,300
		5.600%, 7/01/21 (Alternative Minimum Tax)

		New Mexico - 2.2%

	4,000	University of New Mexico, FHA-Insured Mortgage Hospital Revenue Bonds, Series 2004, 4.625%,	7/14 at 100.00	AAA	4,007,640
		1/01/25 - FSA Insured

		New York - 3.8%

	2,335	Long Island Power Authority, New York, Electric System General Revenue Bonds, Series 2001A,	9/11 at 100.00	A-	2,538,916
		5.375%, 9/01/21

	35	New York City, New York, General Obligation Bonds, Series 1991B, 7.000%, 2/01/18	2/05 at 100.00	A	35,119

	2,130	Dormitory Authority of the State of New York, Second General Resolution Consolidated Revenue Bonds,	No Opt. Call	A2	2,425,282
		City University System, Series 1990C, 7.500%, 7/01/10

	1,850	New York State Tobacco Settlement Financing Corporation, Tobacco Settlement Asset-Backed and State	6/10 at 100.00	AA-	2,024,862
		Contingency Contract-Backed Bonds, Series 2003B-1C, 5.500%, 6/01/15

		North Carolina - 4.3%

	5,000	North Carolina Municipal Power Agency 1, Catawba Electric Revenue Bonds, Series 2003A, 5.250%,	1/13 at 100.00	AAA	5,492,150
		1/01/18 - MBIA Insured

	2,345	Piedmont Triad Airport Authority, North Carolina, Airport Revenue Bonds, Series 2001A, 5.250%,	7/11 at 101.00	AAA	2,575,045
		7/01/16 - FSA Insured

		Oklahoma - 1.7%

	3,000	Oklahoma Development Finance Authority, Revenue Bonds, St. John Health System, Series 2004,	2/14 at 100.00	AA	3,085,050
		5.000%, 2/15/24

		Pennsylvania - 2.5%

	2,435	Dauphin County Industrial Development Authority, Pennsylvania, Water Development Revenue Refunding	No Opt. Call	A-	3,026,462
		Bonds, Dauphin Consolidated Water Supply Company, Series 1992B, 6.700%, 6/01/17

	500	Pennsylvania Higher Educational Facilities Authority, Revenue Bonds, Widner University, Series	7/13 at 100.00	BBB+	520,755
		2003, 5.250%, 7/15/24

	1,000	Philadelphia Authority for Industrial Development, Pennsylvania, Airport Revenue Bonds,	7/11 at 101.00	AAA	1,098,320
		Philadelphia Airport System Project, Series 2001A, 5.500%, 7/01/17 (Alternative Minimum Tax) -
		FGIC Insured

		South Carolina - 3.2%

	1,500	Lexington County Health Service District, South Carolina, Hospital Revenue Refunding and	11/13 at 100.00	A	1,679,460
		Improvement Bonds, Series 2003, 6.000%, 11/01/18

	1,500	Medical University Hospital Authority, South Carolina, FHA-Insured Mortgage Revenue Bonds, Series	8/14 at 100.00	AAA	1,627,245
		2004A, 5.250%, 8/15/20 (DD, settling 1/03/05) - MBIA Insured

	2,500	South Carolina JOBS Economic Development Authority, Economic Development Revenue Bonds, Bon Secours	11/12 at 100.00	A-	2,585,375
		Health System Inc., Series 2002A, 5.625%, 11/15/30

		South Dakota - 0.5%

	1,000	South Dakota Health and Educational Facilities Authority, Revenue Bonds, Sioux Valley Hospital and	11/14 at 100.00	A+	1,013,110
		Health System, Series 2004A, 5.250%, 11/01/34

		Tennessee - 1.1%

	2,000	Knox County Health, Educational and Housing Facilities Board, Tennessee, Hospital Revenue Bonds,	4/12 at 101.00	Baa3	2,053,320
		Baptist Health System of East Tennessee Inc., Series 2002, 6.375%, 4/15/22

		Texas - 14.4%

	3,755	Grand Prairie Industrial Development Authority, Texas, Industrial Development Revenue Refunding	No Opt. Call	A-	3,767,241
		Bonds, Baxter International Inc. Project, Series 1992, 6.550%, 12/01/12

	2,500	Harris County Health Facilities Development Corporation, Texas, Thermal Utility Revenue Bonds, TECO	11/13 at 100.00	AAA	2,548,300
		Project, Series 2003, 5.000%, 11/15/30 - MBIA Insured

	3,000	Houston, Texas, Airport System Subordinate Lien Revenue Bonds, Series 2002B, 5.500%, 7/01/18	7/12 at 100.00	AAA	3,343,800

	3,125	Katy Independent School District, Harris, Fort Bend and Waller Counties, Texas, General Obligation	2/12 at 100.00	AAA	3,175,719
		Bonds, Series 2002A, 5.000%, 2/15/32

	1,825	Killeen Independent School District, Bell County, Texas, General Obligation Bonds, Series 1998,	2/08 at 100.00	AAA	1,948,133
		5.000%, 2/15/14

	5,000	North Central Texas Health Facilities Development Corporation, Hospital Revenue Refunding Bonds,	5/06 at 102.00	AA-	5,166,900
		Baylor Healthcare System, Series 1995, 5.250%, 5/15/16

	4,750	Sam Rayburn Municipal Power Agency, Texas, Power Supply System Revenue Refunding Bonds, Series	10/12 at 100.00	AA	5,170,945
		2002A, 5.500%, 10/01/17 - RAAI Insured

	1,750	Texas, General Obligation Bonds, Water Financial Assistance Program, Series 2003A, 5.125%, 8/01/42	8/13 at 100.00	Aa1	1,766,258
		(Alternative Minimum Tax)

		Utah - 0.9%

	1,710	Intermountain Power Agency, Utah, Power Supply Revenue Refunding Bonds, Series 1996D, 5.000%,	7/06 at 102.00	A+	1,754,101
		7/01/21

		Washington - 2.1%

	3,880	Washington, General Obligation Bonds, Series 1993A, 4.500%, 10/01/18	4/05 at 100.00	Aa1	3,881,009

		West Virginia - 1.2%

	2,150	Berkeley County Building Commission, West Virginia, Hospital Revenue Bonds, City Hospital, Series	5/05 at 100.00	BBB-	2,152,791
		1992, 6.500%, 11/01/09

		Wisconsin - 1.4%

	2,500	Wisconsin, General Obligation Refunding Bonds, Series 2003-3, 5.000%, 11/01/26	11/13 at 100.00	AA-	2,600,300

$	171,165	Total Long-Term Investments (cost $172,541,508) - 96.9%			180,201,068

		Short-Term Investments - 2.2%

	2,000	New York City, New York, General Obligation Bonds, Variable Rate Demand Obligations, Fiscal Series		A-1+	2,000,000
		2002A-7, 2,160%, 11/01/24 - AMBAC Insured †

	2,000	New York City Municipal Water Finance Authority, New York, Water and Sewerage System Revenue Bonds,		A-1+	2,000,000
		Variable Rate Demand Obligations, Fiscal Series 1993C, 2.100%, 6/15/22 - FGIC Insured †

$	4,000	Total Short-Term Investments (cost $4,000,000)			4,000,000

		Total Investments (cost $176,541,508) - 99.1%			184,201,068

		Other Assets Less Liabilities - 0.9%			1,699,957

		Net Assets - 100%			$185,901,025


*	Optional Call Provisions: Dates (month and year) and prices of the earliest optional call or redemption. There
	may be other call provisions at varying prices at later dates.
**	Ratings: Using the higher of Standard & Poor's or Moody's rating.
***	Securities are backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency
	securities which ensures the timely payment of principal and interest. Such securities are normally considered
	to be equivalent to AAA rated securities.
#	On December 9, 2002, UAL Corporation, the holding company of United Air Lines, Inc. filed for federal
	bankruptcy protection. The Adviser determined that it was likely United would not remain current on their
	interest payment obligations with respect to these bonds and thus has stopped accruing interest.
N/R	Investment is not rated.
(DD)	Security purchased on a delayed delivery basis.
†	Security has a maturity of more than one year, but has variable rate and demand features which qualify it as a
	short-term security. The rate disclosed is that currently in effect. This rate changes periodically based on
	market conditions or a specified market index.

	Income Tax Information

	The following information is presented on an income tax basis. Differences between amounts for financial
	statement and federal income tax purposes are primarily due to timing differences in recognizing income on
	taxable market discount securities and timing differences in recognizing certain gains and losses on security
	transactions.

	At December 31, 2004, the cost of investments was $176,500,730.

	Gross unrealized appreciation and gross unrealized depreciation of investments at December 31, 2004, were as
	follows:

	Gross unrealized:
	Appreciation	$8,547,379
	Depreciation	(847,041)

	Net unrealized appreciation of investments	$7,700,338

Item 2. Controls and Procedures.

The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rule 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934 (17 CFR 240.13a-15(b) or 240.15d-15(b)).
There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant's last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting.

Item 3. Exhibits.

File as exhibits as part of this Form a separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the 1940 Act (17 CFR 270.30a-2(a)), exactly as set forth below: EX-99 CERT Attached hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant) Nuveen Select Tax-Free Income Portfolio 3

By (Signature and Title)* /s/ Jessica R. Droeger--Vice President and Secretary

Date 02/28/05

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By (Signature and Title)* /s/ Gifford R. Zimmerman--Chief Administrative Officer (principal executive officer)

Date 02/28/05

By (Signature and Title)* /s/ Stephen D. Foy--Vice President and Controller (principal financial officer)

Date 02/28/05

* Print the name and title of each signing officer under his or her signature.

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY

SIGNATURES

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-Q