Solid Freeform Fabrication (SFF) is a rapid manufacturing process that builds parts by incremental material deposition and fusion of thin 2-l/2 dimensional layers. The layers are generated by slicing the CAD model with a set of parallel planes perpendicular to the build-up direction. A new SFF technology called Shape Deposition Manufacturing (SDM) builds 3-D objects by incremental material deposition and material removal. The advantage of this method results from full 3-D shape control of all object surfaces. In contrast, traditional SFF methods generate surface steps between layers. In SDM, CAD models are partitioned into 3-D layers. The layers are further decomposed into compacts that can be processed in a single step. The compacts are also monotonic with respect to the buildup direction such that a ray cast along the build-up direction from the top enters a compact through its non-undercut surface and exits through its undercut surface. In order to satisfy the monotonicity constraint, the model is partitioned along partition surfaces whose normals are not necessarily along the build-up direction (in contrast to the method currently used in SFF).In this paper, we outline an algorithm which generates these partition surfaces and subsequently 3-D layers and compacts. Silhouette curves separating the undercut surface portion from the nonundercut surface portion are generated for the entire model. The model's surfaces are then split along these silhouette curves to generate monotonic surfaces. The edges adjacent to both undercut and non-undercut surfaces are classified into concave and convex silhouette edges. These edges form silhouette loops that are projected onto a plane perpendicular to the build-up direction. Partition surfaces are obtained as ruled surfaces by sweeping a certain set of silhouette edges along the build-up direction. This set of silhouette edges is obtained if the silhouette edges are concave, if the projected silhouette loop has self-intersections and if the silhouette loops cannot be sorted along the build-up direction. The CAD model is then decomposed into compacts using the partition surfaces. The algorithm was tested by building complex 3-D objects with smooth (step-free) surfaces.