Exhibit 99.3
 
                    INSTRUCTIONS TO REGISTERED HOLDER AND/OR
         BOOK-ENTRY TRANSFER FACILITY PARTICIPANT FROM BENEFICIAL OWNER
                                       OF
                             TERRA INDUSTRIES INC.
                    10 1/2% SENIOR NOTES DUE 2005, SERIES A
 
To Registered Holder and/or Participant of the Book-Entry Transfer Facility:
   
  The undersigned hereby acknowledges receipt of the Prospectus dated August
11, 1995 (the "Prospectus") of Terra Industries Inc., a Maryland corporation
(the "Company"), and the accompanying Letter of Transmittal (the "Letter of
Transmittal"), that together constitute the Company's offer (the "Exchange
Offer"). Capitalized terms used but not defined herein have the meanings
ascribed to them in the Prospectus.     
 
  This will instruct you, the registered holder and/or book-entry transfer
facility participant, as to the action to be taken by you relating to the
Exchange Offer with respect to the 10 1/2% Senior Notes due 2005, Series A (the
"Notes") held by you for the account of the undersigned.
 
  The aggregate face amount of the Notes held by you for the account of the
undersigned is (fill in amount):
 
  $            of the 10 1/2% Senior Notes due 2005, Series A.
 
  With respect to the Exchange Offer, the undersigned hereby instructs you
(check appropriate box):
 
  [_] TO TENDER the following Notes held by you for the account of the
  undersigned (insert principal amount of Notes to be tendered if any):
  $
 
  [_] NOT TO TENDER any Notes held by you for the account of the undersigned.
 
  If the undersigned instructs you to tender the Notes held by you for the
account of the undersigned, it is understood that you are authorized (a) to
make, on behalf of the undersigned (and the undersigned, by its signature
below, hereby makes to you), the representation and warranties contained in the
Letter of Transmittal that are to be made with respect to the undersigned as a
beneficial owner, including but not limited to, the representations that (i)
the undersigned is acquiring the Exchange Notes in the ordinary course of
business of the undersigned, (ii) the undersigned is not participating, does
not intend to participate, and has no arrangement or understanding with any
person to participate in the distribution of the Exchange Notes, (iii) the
undersigned acknowledges that any person participating in the Exchange Offer
for the purpose of distributing the Exchange Notes must comply with the
registration and prospectus delivery requirements of the Securities Act of
1933, as amended (the "Act"), in connection with a secondary resale transaction
of the Exchange Notes acquired by such person and cannot rely on the position
of the Staff of the Securities and Exchange Commission set forth in no action
letters that are discussed in the section of the Prospectus entitled "Exchange
Offer--Resales of the Exchange Notes" and (iv) the undersigned is not an
"affiliate," as defined in Rule 405 under the Act, of the Company or a broker-
dealer tendering Notes acquired directly from the Company for its own account;
(b) to agree, on behalf of the undersigned, as set forth in the Letter of
Transmittal; and (c) to take such other action as necessary under the
Prospectus or the Letter of Transmittal to effect the valid tender of such
Notes.
 
 
                                   SIGN HERE
 
 Name of beneficial owner(s): ________________________________________________
 
 Signature(s): _______________________________________________________________
 
 Name (please print): ________________________________________________________
 
 Address: ____________________________________________________________________
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 Telephone Number: ___________________________________________________________
 
 Taxpayer Identification or Social Security Number: __________________________
 
 Date: _______________________________________________________________________