  We show that the theory of isothermic surfaces in $\E^3$ -- one of the oldest
branches of differential geometry -- can be reformulated within the modern
theory of completely integrable (soliton) systems. This enables one to study
the geometry of isothermic surfaces in $\E^3$ by means of powerful spectral
methods available in the soliton theory. Also the associated non-linear system
is interesting in itself since it displays some unconventional soliton features
and, physically, could be applied in the theory of infinitesimal deformations
of membranes.
