The Division III tournament made up the fourth level of competition at the 2006 IIHF World U18 Championships and took place between 13 and 19 March 2006 in Miercurea Ciuc, Romania.

The tournament was won by Romania who upon winning gained promotion, along with Israel who finished in second place, to Division II of the 2007 IIHF World U18 Championships.

[1] Bulgaria, Israel, New Zealand and Turkey all returned to compete in the Division III competition after missing promotion at the previous years World Championships.

[1] Bulgaria and Turkey who finished fifth and sixth respectively were relegated to the Division III Qualification tournament for the 2007 IIHF World U18 Championships.

[1][5] Daniel Erlich of Israel finished as the tournaments top scorer after recording 26 points including 12 goals and 14 assists.