Transaction Logic is an extension of predicate logic that accounts in a clean and declarative way for the phenomenon of state changes in logic programs and databases. This extension adds connectives specifically designed for combining simple actions into complex transactions and for providing control over their execution. The logic has a natural model theory and a sound and complete proof theory. Transaction Logic has a Horn clause subset, which has a procedural as well as a declarative semantics. The important features of the logic include hypothetical and committed updates, dynamic constraints on transaction execution, non-determinism, and bulk updates. In this way, Transaction Logic is able to declaratively capture a number of non-logical phenomena, including procedural knowledge in artificial intelligence, active databases, and methods with side effects in object databases.