Method and apparatus for situation-based management of natural and artificial systems using event correlation and a situation manager. Input is provided from multiple sources in the form of a collection of events. A first level of processing performs event correlation over the collection of events and infers new events and new qualities of events. A second level of processing manages situations based on the collection of events, where situations are recognized, maintained, and given a degree of confidence. Situations are periodically updated based on incoming events. The assertion of a situation may call for information from external sources, provide information for external sources, and provide control instructions to external sources. Given a current situation, past, and possible future situations are inferred. Additionally, a method and apparatus for bi-directional communication between the event correlator and situation manager.