In this paper we propose a new logic of minimal knowledge. Our approac
h falls into the general scheme of Shoham's preference semantics. It s
tems from an earlier work on logics of minimal knowledge by Halpern an
d Moses, Lin and Shoham, and Lifschitz. The novelty of our work is in
a procedure for minimizing knowledge which we propose in this paper, a
nd which is different from earlier proposals. We show that our logic p
reserves most desirable properties of earlier formalisms and at the sa
me time avoids some of their drawbacks. In addition to a semantic defi
nition of our system, we provide its equivalent syntactic characteriza
tion which relates our logic with the nonmonotonic modal logic S4F and
allows us to use in our investigations standard modal logic technique
s.