In this paper, we present a new hypergraph partitioning algorithmthat is based on the multilevel paradigm. In the multilevel paradigm,a sequence of successively coarser hypergraphs is constructed. Abisection of the smallest hypergraph is computed and it is used toobtain a bisection of the original hypergraph by successively projectingand refining the bisection to the next level finer hypergraph.We evaluate the performance both in terms of the size of the hyper-edgecut on the bisection as well as run time on a number of VLSIcircuits. Our experiments show that our multilevel hypergraph partitioningalgorithm produces high quality partitioning in relativelysmall amount of time. The quality of the partitionings produced byour scheme are on the average 4% to 23% better than those producedby other state-of-the-art schemes. Furthermore, our partitioning algorithmissignificantly faster, often requiring 4 to 15 times less timethan that required by the other schemes. Our multilevel hypergraphpartitioning algorithm scales very well for large hypergraphs. Hypergraphswith over 100,000 vertices can be bisected in a few minuteson today's workstations. Also, on the large hypergraphs, ourscheme outperforms other schemes (in hyperedge cut) quite consistentlywith larger margins (9% to 30%).