A three-group method is developed for analysing light-water UO, cores of low enrichment. The method is composed of a series of sub-routines that are consolidated to produce a set of self-consistent multigroup parameters. The thermal cross-sections are determined by averaging the cross-section over a ‘hardened’ or shifted Maxwellian spectrum, the amount of hardening being a function of the macroscopic absorption-to-slowing-down ratio. The disadvantage factor is calculated using diffusion theory for the moderator and a transport condition at the surface bf the rod, the accuracy of the calculation being comparable to a P-3 calculation. The epithermal capture cross-section of 238U is based on the measurement of Hellstrand including a H barn 1/v absorption, and ignores epithermal self-shielding effects even for very close-packed lattices. The fast-fission factor is calculated relative to the experimental measurements for UO 2. The diffusion coefficients are found by averaging the measured cross-sections over the appropriate neutron flux in each neutron energy group. The slowing-down cross-section is defined as the diffusion coefficient divided by the neutron age, the age being determined by calculating equivalent transport and slowing-down factors relative to light-water measurements. Utilizing the two-dimensional IBM-704 PDQ digital computer code, a comparison is made with the available experimental information using oxide fuel. These experiments, which contain rod-type fuel elements, cover a wide range of 235U enrichment and water-to-uranium ratio. The reactivity and power distribution predictions are very good. The reactivity calculations check to within 2 per cent Δk for all cases, most cases being within 1 per cent Δk.