From 6 December 1922, it was the lower house (Dáil Éireann) of the Oireachtas of the Irish Free State, until its dissolution on 9 August 1923.

Since the largely uncontested election of the Second Dáil in 1921, the Anglo-Irish Treaty had been negotiated, and Sinn Féin—the only political party represented in the Dáil—had split into pro- and anti-Treaty factions; these two factions became the major contestants of the 1922 election, and other parties stood for the first time.

The pro-treaty side won a majority of seats; the anti-treaty faction boycotted the new assembly, refusing to recognise the body as the legitimate heir to the Second Dáil, and the Irish Civil War broke out shortly afterwards.

However, according to British political theory, the assembly of Irish MPs in Dublin did not constitute a valid parliament, and was subsequently declared illegal.

Arthur Griffith was elected as President of Dáil Éireann on 10 January 1922 and formed a new Ministry of Dáil Éireann, while Michael Collins was appointed as Chairman of the Provisional Government on 16 January 1922 and formed the Provisional Government of Ireland.

Laurence Ginnell turned up in the assembly to demand an answer as to which category, crown or republic, it belonged.

[5] The Constitution of the Irish Free State provided, within its own articles, that it would not come into effect until it had been adopted by both the British Parliament and the Third Dáil, which it referred to as the "constituent assembly".

The document was then enacted by the British Parliament by the Irish Free State Constitution Act 1922 and came into force on 6 December.

However it provided that until the first elections to this new lower house the "constituent assembly" would exercise "all the powers and authorities" conferred on the "new" Dáil Éireann.

The Third Dáil therefore functioned as a legislative lower house from December 1922 until it was dissolved on 9 August 1923 before the 1923 general election.