Form N-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-Q


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)

Nuveen Investments
        333 West Wacker Drive, Chicago, Illinois 60606         

(Address of principal executive offices) (Zip code)


Kevin J. McCarthy 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:            03/31          

Date of reporting period:         12/31/07         

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, 2007             
Principal        Optional Call         
Amount (000)    Description (1)    Provisions (2)    Ratings (3)    Value 

    Municipal Bonds – 99.1%             
    Alabama – 0.3%             
$             500    Marshall County Healthcare Authority, Alabama, Revenue Bonds, Series 2002A, 6.250%, 1/01/22    1/12 at 101.00    A–   $   529,770 

    California – 6.8%             
2,105    Azusa Unified School District, Los Angeles County, California, General Obligation Bonds,    7/12 at 100.00    AAA    2,266,643 
     Series 2002, 5.375%, 7/01/21 – FSA Insured             
3,350    California Department of Water Resources, Power Supply Revenue Bonds, Series 2002A,    5/12 at 101.00    Aa3    3,715,519 
     6.000%, 5/01/14             
2,595    California Health Facilities Financing Authority, Revenue Bonds, Kaiser Permanante System,    4/16 at 100.00    A+    2,521,017 
     Series 2006, 5.000%, 4/01/37             
445    Golden State Tobacco Securitization Corporation, California, Enhanced Tobacco Settlement    6/17 at 100.00    BBB    400,887 
     Asset-Backed Bonds, Series 2007A-1, 4.500%, 6/01/27             
3,000    Golden State Tobacco Securitization Corporation, California, Tobacco Settlement Asset-Backed    6/13 at 100.00    AAA    3,470,280 
     Bonds, Series 2003A-1, 6.750%, 6/01/39 (Pre-refunded 6/01/13)             
250    Santa Ana Unified School District, Orange County, California, General Obligation Bonds, Series    8/10 at 101.00    AAA    264,128 
     2000, 5.700%, 8/01/29 – FGIC Insured             

11,745    Total California            12,638,474 

    Colorado – 6.6%             
1,540    Arkansas River Power Authority, Colorado, Power Revenue Bonds, Series 2006, 5.250%, 10/01/40 –    10/16 at 100.00    AAA    1,561,883 
     XLCA Insured             
400    Colorado Department of Transportation, Certificates of Participation, Series 2004, 5.000%,    6/14 at 100.00    AAA    409,852 
     6/15/34 – MBIA Insured             
2,265    Colorado Health Facilities Authority, Revenue Bonds, Catholic Health Initiatives, Series    3/12 at 100.00    AA (4)    2,425,498 
     2002A, 5.500%, 3/01/22 (ETM)             
1,735    Colorado Health Facilities Authority, Revenue Bonds, Catholic Health Initiatives, Series    3/12 at 100.00    AA (4)    1,885,546 
     2002A, 5.500%, 3/01/22 (Pre-refunded 3/01/12)             
2,395    Denver City and County, Colorado, Airport System Revenue Bonds, Series 1991D, 7.750%, 11/15/13    No Opt. Call    A+    2,668,437 
     (Alternative Minimum Tax)             
3,000    Denver Convention Center Hotel Authority, Colorado, Senior Revenue Bonds, Convention Center    12/13 at 100.00    Aaa    3,264,450 
     Hotel, Series 2003A, 5.000%, 12/01/24 (Pre-refunded 12/01/13) – XLCA Insured             

11,335    Total Colorado            12,215,666 

    Connecticut – 0.2%             
250    Connecticut Health and Educational Facilities Authority, Revenue Bonds, Bridgeport Hospital    1/08 at 100.00    AAA    251,055 
     Issue, Series 1992A, 6.625%, 7/01/18 – MBIA Insured             

    District of Columbia – 0.2%             
15    District of Columbia, General Obligation Bonds, Series 1993E, 6.000%, 6/01/13 – MBIA    6/08 at 100.00    AAA    15,034 
       Insured (ETM)             
235    District of Columbia, General Obligation Refunding Bonds, Series 1994A-1, 6.500%, 6/01/10 –    No Opt. Call    AAA    252,691 
     MBIA Insured             

250    Total District of Columbia            267,725 

    Florida – 5.5%             
1,000    Hillsborough County Industrial Development Authority, Florida, Hospital Revenue Bonds, Tampa    10/16 at 100.00    A3    965,450 
     General Hospital, Series 2006, 5.250%, 10/01/41             
5,020    JEA St. John’s River Power Park System, Florida, Revenue Refunding Bonds, Issue 2, Series    10/11 at 100.00    Aa2    5,256,141 
     2002-17, 5.000%, 10/01/18             
4,000    JEA, Florida, Subordinate Lien Electric System Revenue Bonds, Series 2002D, 4.625%, 10/01/22    4/08 at 100.00    Aa3    4,000,160 

10,020    Total Florida            10,221,751 

    Georgia – 0.3%             
545    Atlanta, Georgia, Airport Facilities Revenue Bonds, Series 1990, 0.000%, 1/01/10 – MBIA    No Opt. Call    AAA    488,887 
     Insured (Alternative Minimum Tax)             

    Illinois – 18.2%             
125    Chicago Metropolitan Housing Development Corporation, Illinois, FHA-Insured Section 8 Assisted    1/08 at 100.00    AA    128,801 
     Housing Development Revenue Refunding Bonds, Series 1992, 6.850%, 7/01/22             
1,930    Illinois Development Finance Authority, Revenue Bonds, Midwestern University, Series 2001B,    5/11 at 101.00    A– (4)    2,106,325 
     5.750%, 5/15/16 (Pre-refunded 5/15/11)             
705    Illinois Finance Authority, Revenue Bonds, University of Chicago, Series 2007, Residual 73TP,    7/17 at 100.00    AA    727,440 
     7.588%, 7/01/46 (IF)             
2,185    Illinois Finance Authority, Revenue Bonds, YMCA of Southwest Illinois, Series 2005, 5.000%,    9/15 at 100.00    AA    2,074,439 
     9/01/31 – RAAI Insured             
4,450    Illinois Health Facilities Authority, Remarketed Revenue Bonds, University of Chicago Project,    8/11 at 103.00    Aa1    4,740,808 
     Series 1985A, 5.500%, 8/01/20             
1,500    Illinois Health Facilities Authority, Revenue Bonds, Evangelical Hospitals Corporation, Series    No Opt. Call    N/R (4)    1,820,520 
     1992C, 6.250%, 4/15/22 (ETM)             
2,225    Illinois Health Facilities Authority, Revenue Refunding Bonds, Elmhurst Memorial Healthcare,    1/13 at 100.00    A2    2,402,778 
     Series 2002, 6.250%, 1/01/17             
2,500    Illinois Housing Development Authority, Homeowner Mortgage Revenue Bonds, Series 2006C2,    2/16 at 100.00    AA    2,475,350 
     5.050%, 8/01/27 (Alternative Minimum Tax)             
5,700    Illinois, Sales Tax Revenue Bonds, First Series 2002, 5.000%, 6/15/22    6/13 at 100.00    AAA    5,962,884 
2,000    Illinois, Sales Tax Revenue Bonds, Series 1997X, 5.600%, 6/15/17    6/08 at 100.50    AAA    2,023,900 
1,000    Kankakee & Will Counties Community Unit School District 5, Illinois, General Obligation Bonds,    No Opt. Call    Aaa    491,240 
     Series 2006, 0.000%, 5/01/23 – FSA Insured             
6,000    Metropolitan Pier and Exposition Authority, Illinois, Revenue Refunding Bonds, McCormick Place    6/12 at 101.00    AAA    6,300,060 
     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    1,363,258 
1,000    Yorkville, Illinois, General Obligation Debt Certificates, Series 2003, 5.000%, 12/15/22    12/11 at 100.00    AA (4)    1,068,860 
     (Pre-refunded 12/15/11) – RAAI Insured             

32,620    Total Illinois            33,686,663 

    Indiana – 6.4%             
1,000    Franklin Community Multi-School Building Corporation, Marion County, Indiana, First Mortgage    7/14 at 100.00    AAA    1,092,780 
     Revenue Bonds, Series 2004, 5.000%, 7/15/22 (Pre-refunded 7/15/14) – FGIC Insured             
3,500    Indiana Health Facility Financing Authority, Hospital Revenue Bonds, Methodist Hospitals Inc.,    9/11 at 100.00    A–    3,510,185 
     Series 2001, 5.375%, 9/15/22             
2,500    Indiana Health Facility Financing Authority, Hospital Revenue Refunding Bonds, Columbus    No Opt. Call    AAA    2,853,975 
     Regional Hospital, Series 1993, 7.000%, 8/15/15 – FSA Insured             
2,000    Indianapolis Local Public Improvement Bond Bank, Indiana, Waterworks Project, Series 2002A,    7/12 at 100.00    AAA    2,166,640 
     5.250%, 7/01/33 (Pre-refunded 7/01/12) – MBIA Insured             
2,295    Shelbyville Central Renovation School Building Corporation, Indiana, First Mortgage Bonds,    7/15 at 100.00    AAA    2,257,959 
     Series 2005, 4.375%, 7/15/25 – MBIA Insured             

11,295    Total Indiana            11,881,539 

    Iowa – 5.7%             
2,745    Iowa Finance Authority, Health Facility Revenue Bonds, Care Initiatives Project, Series 2006A,    7/16 at 100.00    BBB–    2,661,881 
     5.000%, 7/01/20             
750    Iowa Tobacco Settlement Authority, Tobacco Asset-Backed Revenue Bonds, Series 2005B,    6/17 at 100.00    BBB    695,040 
     5.600%, 6/01/34             
    Iowa Tobacco Settlement Authority, Tobacco Settlement Asset-Backed Revenue Bonds, Series 2001B:             
3,850     5.300%, 6/01/25 (Pre-refunded 6/01/11)    6/11 at 101.00    AAA    4,095,669 
2,850     5.600%, 6/01/35 (Pre-refunded 6/01/11)    6/11 at 101.00    AAA    3,081,221 

10,195    Total Iowa            10,533,811 

    Kansas – 1.1%             
    Lawrence, Kansas, Hospital Revenue Bonds, Lawrence Memorial Hospital, Series 2006:             
1,425     5.125%, 7/01/26    7/16 at 100.00    A3    1,433,294 
700     4.875%, 7/01/36    7/16 at 100.00    A3    654,563 

2,125    Total Kansas            2,087,857 

    Maine – 0.7%             
125    Maine Health and Higher Educational Facilities Authority, Revenue Bonds, Series 1999B, 6.000%,    7/09 at 101.00    AAA    130,874 
     7/01/19 – MBIA Insured             
1,075    Maine Health and Higher Educational Facilities Authority, Revenue Bonds, Series 1999B, 6.000%,    7/09 at 101.00    Aaa    1,132,319 
     7/01/19 (Pre-refunded 7/01/09) – MBIA Insured             

1,200    Total Maine            1,263,193 

    Massachusetts – 0.8%             
1,000    Massachusetts Development Finance Agency, Resource Recovery Revenue Bonds, Ogden Haverhill    12/08 at 102.00    BBB    1,003,840 
     Associates, Series 1998B, 5.200%, 12/01/13 (Alternative Minimum Tax)             
15    Massachusetts Health and Educational Facilities Authority, Revenue Bonds, Partners HealthCare    7/11 at 101.00    AA    16,353 
     System Inc., Series 2001C, 6.000%, 7/01/17             
485    Massachusetts Health and Educational Facilities Authority, Revenue Bonds, Partners HealthCare    7/11 at 101.00    Aa2 (4)    534,902 
     System Inc., Series 2001C, 6.000%, 7/01/17 (Pre-refunded 7/01/11)             

1,500    Total Massachusetts            1,555,095 

    Michigan – 3.4%             
1,500    Detroit, Michigan, Sewer Disposal System Revenue Bonds, Second Lien, Series 2006B, 4.625%,    7/16 at 100.00    AAA    1,468,575 
     7/01/34 – FGIC Insured             
2,900    Michigan State Hospital Finance Authority, Hospital Revenue Refunding Bonds, Trinity Health    12/12 at 100.00    AA    2,976,618 
     Credit Group, Series 2002C, 5.375%, 12/01/30             
235    Michigan State Hospital Finance Authority, Revenue Refunding Bonds, Detroit Medical Center    2/08 at 100.00    BB–    235,157 
     Obligated Group, Series 1993A, 6.500%, 8/15/18             
1,600    Plymouth-Canton Community School District, Wayne and Washtenaw Counties, Michigan, Unlimited    5/09 at 100.00    AA–    1,622,944 
     Tax General Obligation School Building and Site Bonds, Series 1999, 4.750%, 5/01/18             

6,235    Total Michigan            6,303,294 

    Mississippi – 0.4%             
725    Mississippi Hospital Equipment and Facilities Authority, Revenue Bonds, Baptist Memorial    9/14 at 100.00    N/R    734,585 
     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 –    1/13 at 100.00    AAA    3,570,525 
     AMBAC Insured             

    Nevada – 4.9%             
4,095    Director of Nevada State Department of Business and Industry, Revenue Bonds, Las Vegas    1/10 at 100.00    AAA    4,122,355 
     Monorail Project, First Tier, Series 2000, 5.375%, 1/01/40 – AMBAC Insured             
1,680    Reno, Nevada, Capital Improvement Revenue Bonds, Series 2002, 5.500%, 6/01/22 – FGIC Insured    6/12 at 100.00    AAA    1,795,769 
2,830    Reno, Nevada, Capital Improvement Revenue Bonds, Series 2002, 5.500%, 6/01/22 (Pre-refunded    6/12 at 100.00    AAA    3,091,747 
     6/01/12) – FGIC Insured             

8,605    Total Nevada            9,009,871 

    New Hampshire – 0.3%             
500    New Hampshire Housing Finance Authority, Single Family Mortgage Acquisition Bonds, Series    5/11 at 100.00    Aa2    509,340 
     2001A, 5.600%, 7/01/21 (Alternative Minimum Tax)             

    New Jersey – 1.5%             
    Tobacco Settlement Financing Corporation, New Jersey, Tobacco Settlement Asset-Backed Bonds,             
    Series 2003:             
1,000     6.750%, 6/01/39 (Pre-refunded 6/01/13)    6/13 at 100.00    AAA    1,163,180 
1,355     6.250%, 6/01/43 (Pre-refunded 6/01/13)    6/13 at 100.00    AAA    1,542,884 

2,355    Total New Jersey            2,706,064 

    New Mexico – 2.7%             
1,000    New Mexico Mortgage Finance Authority, Multifamily Housing Revenue Bonds, St Anthony, Series    9/17 at 100.00    AAA    975,760 
     2007A, 5.250%, 9/01/42 (Alternative Minimum Tax)             
4,000    University of New Mexico, FHA-Insured Mortgage Hospital Revenue Bonds, Series 2004, 4.625%,    7/14 at 100.00    AAA    4,031,280 
     1/01/25 – FSA Insured             

5,000    Total New Mexico            5,007,040 

    New York – 3.6%             
1,180    Dormitory Authority of the State of New York, Second General Resolution Consolidated Revenue    No Opt. Call    A1    1,248,416 
     Bonds, City University System, Series 1990C, 7.500%, 7/01/10             
2,335    Long Island Power Authority, New York, Electric System General Revenue Bonds, Series 2001A,    9/11 at 100.00    AAA    2,519,769 
     5.375%, 9/01/21 (Pre-refunded 9/01/11)             
35    New York City, New York, General Obligation Bonds, Series 1991B, 7.000%, 2/01/18    2/08 at 100.00    AA    35,094 
1,000    New York Dorm Authority, FHA Insured Mortgage Hospital Revenue Bonds, Kaleida Health,    8/16 at 100.00    AAA    956,100 
     Series 2006, 4.700%, 2/15/35 (UB)             
1,850    New York State Tobacco Settlement Financing Corporation, Tobacco Settlement Asset-Backed and    6/10 at 100.00    AA–    1,928,644 
     State Contingency Contract-Backed Bonds, Series 2003B-1C, 5.500%, 6/01/15             

6,400    Total New York            6,688,023 

    North Carolina – 4.2%             
5,000    North Carolina Municipal Power Agency 1, Catawba Electric Revenue Bonds, Series 2003A, 5.250%,    1/13 at 100.00    AAA    5,352,000 
     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    2,497,448 
     7/01/16 – FSA Insured             

7,345    Total North Carolina            7,849,448 

    Oklahoma – 1.6%             
3,000    Oklahoma Development Finance Authority, Revenue Bonds, St. John Health System, Series 2004,    2/14 at 100.00    AA–    3,049,650 
     5.000%, 2/15/24             

    Pennsylvania – 2.4%             
2,435    Dauphin County Industrial Development Authority, Pennsylvania, Water Development Revenue    No Opt. Call    A–    2,939,118 
     Refunding Bonds, Dauphin Consolidated Water Supply Company, Series 1992B, 6.700%, 6/01/17             
500    Pennsylvania Higher Educational Facilities Authority, Revenue Bonds, Widener University,    7/13 at 100.00    BBB+    505,730 
     Series 2003, 5.250%, 7/15/24             
1,000    Philadelphia Authority for Industrial Development, Pennsylvania, Airport Revenue Bonds,    7/11 at 101.00    AAA    1,062,970 
     Philadelphia Airport System Project, Series 2001A, 5.500%, 7/01/17 – FGIC Insured (Alternative             
     Minimum Tax)             

3,935    Total Pennsylvania            4,507,818 

    South Carolina – 4.8%             
1,500    Lexington County Health Service District, South Carolina, Hospital Revenue Refunding and    11/13 at 100.00    A+ (4)    1,699,200 
     Improvement Bonds, Series 2003, 6.000%, 11/01/18 (Pre-refunded 11/01/13)             
1,500    Medical University Hospital Authority, South Carolina, FHA-Insured Mortgage Revenue Bonds,    8/14 at 100.00    AAA    1,588,830 
     Series 2004A, 5.250%, 8/15/20 – MBIA Insured             
2,500    South Carolina JOBS Economic Development Authority, Economic Development Revenue Bonds, Bon    11/12 at 100.00    A–    2,543,425 
     Secours Health System Inc., Series 2002A, 5.625%, 11/15/30             
3,010    Tobacco Settlement Revenue Management Authority, South Carolina, Tobacco Settlement    5/11 at 101.00    BBB    3,060,086 
     Asset-Backed Bonds, Series 2001B, 6.375%, 5/15/28             

8,510    Total South Carolina            8,891,541 

    South Dakota – 1.1%             
1,010    South Dakota Health and Educational Facilities Authority, Revenue Bonds, Avera Health, Series    7/12 at 101.00    AAA    1,033,522 
     2002, 5.125%, 7/01/27 – AMBAC Insured             
1,000    South Dakota Health and Educational Facilities Authority, Revenue Bonds, Sioux Valley    11/14 at 100.00    AA–    1,013,380 
     Hospitals, Series 2004A, 5.250%, 11/01/34             

2,010    Total South Dakota            2,046,902 

    Tennessee – 1.1%             
2,000    Knox County Health, Educational and Housing Facilities Board, Tennessee, Hospital Revenue    4/12 at 101.00    Ba2    2,043,759 
     Bonds, Baptist Health System of East Tennessee Inc., Series 2002, 6.375%, 4/15/22             

    Texas – 10.7%             
1,500    Central Texas Regional Mobility Authority, Travis and Williamson Counties, Toll Road Revenue    1/15 at 100.00    AAA    1,503,945 
     Bonds, Series 2005, 5.000%, 1/01/45 – FGIC Insured             
2,500    Harris County Health Facilities Development Corporation, Texas, Thermal Utility Revenue Bonds,    11/13 at 100.00    AAA    2,520,725 
     TECO Project, Series 2003, 5.000%, 11/15/30 – MBIA Insured             
3,000    Houston, Texas, Subordinate Lien Airport System Revenue Bonds, Series 2002B, 5.500%, 7/01/18 –    7/12 at 100.00    AAA    3,221,310 
     FSA Insured             
3,125    Katy Independent School District, Harris, Fort Bend and Waller Counties, Texas, General    2/12 at 100.00    AAA    3,336,156 
     Obligation Bonds, Series 2002A, 5.000%, 2/15/32 (Pre-refunded 2/15/12)             
400    Killeen Independent School District, Bell County, Texas, General Obligation Bonds, Series    2/08 at 100.00    AAA    400,868 
     1998, 5.000%, 2/15/14             
1,425    Killeen Independent School District, Bell County, Texas, General Obligation Bonds, Series    2/08 at 100.00    AAA    1,428,449 
     1998, 5.000%, 2/15/14 (Pre-refunded 2/15/08)             
4,750    Sam Rayburn Municipal Power Agency, Texas, Power Supply System Revenue Refunding Bonds,    10/12 at 100.00    AA    4,974,533 
     Series 2002A, 5.500%, 10/01/17 – RAAI Insured             
1,750    Texas, General Obligation Bonds, Water Financial Assistance Program, Series 2003A, 5.125%,    8/13 at 100.00    Aa1    1,753,955 
     8/01/42 (Alternative Minimum Tax)             
500    Victoria, Texas, General Obligation Bonds, Series 2001, 5.000%, 8/15/23 – FGIC Insured    8/11 at 100.00    AAA    518,474 

18,950    Total Texas            19,658,415 

    Washington – 0.3%             
510    Port of Seattle, Washington, Revenue Bonds, Series 2001A, 5.000%, 4/01/31 – FGIC Insured    10/11 at 100.00    AAA    520,913 

    Wisconsin – 1.4%             
2,500    Wisconsin, General Obligation Refunding Bonds, Series 2003-3, 5.000%, 11/01/26    11/13 at 100.00    AA–    2,586,024 

$       175,660    Total Municipal Bonds (cost $176,482,373)            183,304,698 


Shares    Description (1)            Value 

    Common Stocks – 0.0%             
    Airlines – 0.0%             
220    UAL Corporation, (5) (6)          $  7,845 

    Total Common Stocks (cost $0)            7,845 

    Total Investments (cost $176,482,373) – 99.1%            183,312,543 

    Floating Rate Obligations – (0.4)%            (665,000) 

    Other Assets Less Liabilities – 1.3%            2,319,038 

    Net Assets – 100%          $  184,966,581 



    The Fund may invest in “zero coupon” securities. A zero coupon security does not pay a regular interest 
    coupon to its holders during the life of the security. Tax-exempt income to the holder of the security 
    comes from accretion of the difference between the original purchase price of the security at issuance 
    and the par value of the security at maturity and is effectively paid at maturity. Such securities are 
    included in the Portfolio of Investments with a 0.000% coupon rate in their description. The market 
    prices of zero coupon securities generally are more volatile than the market prices of securities that 
    pay interest periodically. 
(1)    All percentages shown in the Portfolio of Investments are based on net assets applicable to Common 
    Shares unless otherwise noted. 
(2)    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. Certain mortgage-backed securities may be 
    subject to periodic principal paydowns. 
(3)    Ratings: Using the higher of Standard & Poor’s Group (“Standard & Poor’s”) or Moody’s Investor Service, 
    Inc. (“Moody’s”) rating. Ratings below BBB by Standard & Poor’s or Baa by Moody’s are considered to be 
    below investment grade. 
    The AAA ratings shown in the Portfolio of Investments reflect the AAA ratings on certain bonds insured 
    by AMBAC, FGIC, XCLA or MBIA and/or the A ratings on certain bonds insured by ACA as of December 31, 
    2007. During December 2007, at least one rating agency reduced the rating for ACA bonds to CCC. 
    Subsequent to December 31, 2007, at least one rating agency reduced the rating for AMBAC-insured bonds 
    to AA, the rating for XCLA-insured bonds to A and the rating for FGIC-insured bonds to A3. One or more 
    rating agencies have placed each of these insurers on “negative credit watch”, which may presage one or 
    more rating reductions for such insurer or insurers in the future. If one or more insurers’ ratings are reduced 
    below AAA (or A in the case of ACA) by these rating agencies, it would likely reduce the effective rating 
    of many of the bonds insured by that insurer or insurers. 
(4)    Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities 
    which ensure the timely payment of principal and interest. Such investments are normally considered to be 
    equivalent to AAA rated securities. 
(5)    Non-income producing. 
(6)    On December 9, 2002, UAL Corporation (“UAL”), the holding company of United Air Lines, Inc. (“United”) 
    filed for federal bankruptcy protection. The Adviser determined that it was likely that United would not 
    remain current on their interest payment obligations with respect to the bonds previously held and thus 
    the Fund had stopped accruing interest on its UAL bonds. On February 1, 2006, UAL emerged from federal 
    bankruptcy with the acceptance of its reorganization plan by the bankruptcy court. Under the settlement 
    agreement established to meet UAL’s unsecured bond obligations, the bondholders, including the Fund, 
    received three distributions of UAL common stock over the subsequent months, and the bankruptcy court 
    dismissed all unsecured claims of bondholders, including those of the Fund. On May 5, 2006, the Fund 
    liquidated such UAL common stock holdings. On September 29, 2006, May 30, 2007 and November 14, 2007,   
    the Fund received additional distributions of 532, 172 and 48 shares, respectively, of UAL common stock
    as a result of its earlier ownership of the UAL bonds. The Fund liquidated 532 shares of such UAL
    common stock holdings on November 15, 2006. The remaining 220 shares of UAL common stock were
    still held by the Fund at December 31, 2007. 
N/R    Not rated. 
(ETM)    Escrowed to maturity. 
(IF)    Inverse floating rate investment. 
(UB)    Underlying bond of an inverse floating rate trust reflected as a financing transaction pursuant to the 
    provisions of SFAS No. 140. 

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 the treatment of paydown gains and losses, timing differences in recognizing taxable market discount, timing differences in recognizing certain gains and losses on investment transactions and the treatment of investments in inverse floating rate transactions subject to SFAS No.140. To the extent that differences arise that are permanent in nature, such amounts are reclassified within the capital accounts on the Statement of Assets and Liabilities presented in the annual report, based on their federal tax basis treatment; temporary differences do not require reclassification. Temporary and permanent differences do not impact the net asset value of the Fund.

At December 31, 2007, the cost of investments was $175,761,774.

Gross unrealized appreciation and gross unrealized depreciation of investments at December 31, 2007, were as follows:


Gross unrealized:     
  Appreciation    $7,660,428 
  Depreciation    (774,882) 

Net unrealized appreciation (depreciation) of investments    $6,885,546 



Item 2. Controls and Procedures.

  1. 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)).
  2. 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/ Kevin J. McCarthy                    
                                                    Kevin J. McCarthy
                                                    Vice President and Secretary

Date         February 29, 2008        

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                    
                                                   Gifford R. Zimmerman
                                                   Chief Administrative Officer (principal executive officer) 

Date         February 29, 2008        

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

Date        February 29, 2008        

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