The discrete Painleve III equation is investigated based on the biline
ar formalism. It is shown that it admits the solutions expressed by th
e Casorati determinant whose entries are given by the discrete Bessel
functions. Moreover, based on the observation that these discrete Bess
el functions are transformed to the q-Bessel functions by a simple var
iable transformation, we present a q-difference analog of the Painleve
III equation. (C) 1995 American Institute of Physics.