We show that the theory of isothermic surfaces in E(3) - one of the ol
dest branches of differential geometry - can be reformulated within th
e modern theory of completely integrable (soliton) systems. This enabl
es one to study the geometry of isothermic surfaces in E(3) by means o
f powerful spectral methods available in the soliton theory. Also the
associated non-linear system is interesting in itself since it display
s some unconventional soliton features and, physically, could be appli
ed in the theory of infinitesimal deformations of membranes.