The representation formalism as well as the representation language is
of great importance for the success of machine learning. The represen
tation formalism should be expressive, efficient, useful, and applicab
le. First-order logic needs to be restricted in order to be efficient
for inductive and deductive reasoning. In the field of knowledge repre
sentation, term subsumption formalisms have been developed which are e
fficient arid expressive. In this article, a learning algorithm, KLUST
ER, is described that represents concept definitions in this formalism
. KLUSTER enhances the representation language if this is necessary fo
r the discrimination of concepts. Hence, KLUSTER is a constructive ind
uction program. KLUSTER builds the most specific generalization and a
most general discrimination in polynomial time. It embeds these concep
t learning problems into the overall task of learning a hierarchy of c
oncepts.