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Abstract: Terminological knowledge representation systems (TKRSs) are tools for designing and using knowledge bases that make use of terminological languages (or concept languages). We analyze from a theoretical point of view a TKRS whose capabilities go beyond the ones of presently available TKRSs. The new features studied, often required in practical applications, can be summarized in three main points. First, we consider a highly expressive terminological language, called ALCNR, including general complements of concepts, number restrictions and role conjunction. Second, we allow to express inclusion statements between general concepts, and terminological cycles as a particular case. Third, we prove the decidability of a number of desirable TKRS-deduction services (like satisfiability, subsumption and instance checking) through a sound, complete and terminating calculus for reasoning in ALCNR-knowledge bases. Our calculus extends the general technique of constraint systems. As a byproduct of the proof, we get also the result that inclusion statements in ALCNR can be simulated by terminological cycles, if descriptive semantics is adopted.