Abstract: The paper proposes the novel design of a 3T XOR gate combining complementary CMOS with pass transistor logic. The design has been compared with earlier proposed 4T and 6T XOR gates and a significant improvement in silicon area and power-delay product has been obtained. An eight transistor full adder has been designed using the proposed three-transistor XOR gate and its performance has been investigated using 0.15um and 0.35um technologies. Compared to the earlier designed 10 transistor full adder, the proposed adder shows a significant improvement in silicon area and power delay product. The whole simulation has been carried out using HSPICE.