This two-volume set constitutes the refereed proceedings of the 11th International Conference on Industrial and Engineering Applications of Artificial Intelligence and Expert Systems, IEA/AIE-98, held in Benicassim, Castellon, Spain, in June 1998. The two volumes present a total of 187 revised full papers selected from 291 submissions. In accordance with the conference, the books are devoted to new methodologies, knowledge modeling and hybrid techniques. The papers explore applications from virtually all subareas of AI including knowledge-based systems, fuzzyness and uncertainty, formal reasoning, neural information processing, multiagent systems, perception, robotics, natural language processing, machine learning, supervision and control systems, etc..