A transitive decomposition of a graph is a partition of the arc set such that there exists a group of automorphisms of the graph which preserves and acts transitively on the partition. This turns out to be a very broad idea, with several striking connections with other areas of mathematics. In this thesis we first develop some general theory of transitive decompositions, and in particular we illustrate some of the more interesting connections with certain combinatorial and geometric structures. We then give complete, or nearly complete, structural characterisations of certain classes of transitive decompositions preserved by a group with a rank 3 action on vertices (such a group has exactly two orbits on ordered pairs of distinct vertices). The main classes of rank 3 groups we study (namely those which are imprimitive, or primitive of grid type) are derived in some way from 2-transitive groups (that is, groups which are transitive on ordered pairs of distinct vertices), and the results we achieve make use of the classification by Sibley in 2004 of transitive decompositions preserved by a 2-transitive group.