The primary goal of this paper is to provide a rigorous theoretical justifi
cation of Cartan's method of moving frames for arbitrary finite-dimensional
Lie group actions on manifolds. The general theorems are based a new regul
arized version of the moving frame algorithm, which is of both theoretical
and practical use. Applications include a new approach to the construction
and classification of differential invariants and invariant differential op
erators on jet bundles, as well as equivalence, symmetry, and rigidity theo
rems for submanifolds under general transformation groups. The method also
leads to complete classifications of generating systems of differential inv
ariants, explicit commutation formulae for the associated invariant differe
ntial operators, and a general classification theorem for syzygies of the h
igher order differentiated differential invariants. A variety of illustrati
ve examples demonstrate how the method can be directly applied to practical
problems arising in geometry, invariant theory, and differential equations
. Mathematics Subject Classifications (1991): 53A55, 58D19, 58H05, 68U10.