The LILOG knowledge representation system is part of LBU/2 -the LILOG Experimentier Umgebung J -a naturM language understanding system for German. The knowledge representation system comprises a sophisticated knowledge representation language based on order-sorted predicate logic enriched by a type system of KL-ONE like languages, default reasoning, and the capalfility to delegate inferences to external deductive components. Tile inference engine processing Ltu.oc can be considered as an experimental theorem proving shell since, h~r example, we are able to exchange inference calculi and search strategies very easily. We sketch the knowledge representation language LHLOG, give an overview of the internal architecture of tile LILOG inference engine, and show how tile inference engine is embedded into the naturM language understanding system LEU/2.