SU(N) Yang-Mills theory in three dimensions, with a Chem-Simons term o
f level k (an integer) added, has two-dimensionful coupling constants
g(2)k and g(2)N; its possible phases depend on the size of k relative
to N. For k much greater than N, this theory approaches topological Ch
ern-Simons theory with no Yang-Mills term, and expectation values of m
ultiple Wilson loops yield Jones polynomials, as Witten has shown; it
can be treated semiclassically. For k=0, the theory is badly infrared
singular in perturbation theory, a nonperturbative mass and subsequent
quantum solitons are generated, and Wilson loops show an area law. We
argue that there is a phase transition between these two behaviors at
a critical value of k(c) called k(c), with k(c)/N approximate to 2+/-
0.7. Three lines of evidence are given. First, a gauge-invariant one-l
oop calculation shows that the perturbative theory has tachyonic probl
ems if k less than or equal to 29N/12. The theory becomes sensible onl
y if there is an additional dynamic source of gauge-boson mass, just a
s in the k=0 case. Second, we study in a rough approximation the free
energy and show that for k less than or equal to k(c) then is a nontri
vial vacuum condensate driven by soliton entropy and driving a gauge-b
oson dynamical mass M, while both the condensate and M vanish for k gr
eater than or equal to k(c). Third, we study possible quantum solitons
stemming from an effective action having both a Chern-Simons mass m a
nd a (gauge-invariant) dynamical mass Arl. We show that if M greater t
han or similar to 0.5m, there are finite-action quantum sphalerons, wh
ile none survive in the classical limit M=0, as shown earlier by D'Hok
er and Vinet. There are also quantum topological vortices smoothly van
ishing as M-->0.