I am also a newbie to ArcGIS 9.3.1 and I am also having the same issues. To preface this, I did not create these DWG, and these files were not given a projection and coordinate system, and I work on AutoCAD Map 3D 2011. So I have a couple of questions. First, every time I add the associated DWG files, I get a message saying �??The following data sources you added are missing spatial reference information. This data can be drawn in ArcMap, but cannot be projected.�?� This also occured when I used the feature class to shapefile conversion. Do I need to define a projection and coordinate system of the DWG on AutoCAD in order for it to show up on ArcMap? And if so, what are some tips on how to make this happen? And second, I thought I installed the Data Interoperability extension for so I can bring DWGs to ArcGIS. However, the extension does not show up on as far as when I try to add it onto ArcCatalog. Would this also be a factor?