We analize instanton generated superpotentials for three dimensional N=2
supersymmetric gauge theories obtained by compactifying on S^1 N=1 four
dimensional theories. In the N_f=1 case, we find that the vacua in the
decompactification limit is given by the singular points of the Coulomb branch
of the N=2 four dimensional theory (we also consider the massive case). The
decompactification limit of the superpotential for pure gauge theories without
chiral matter is interpreted in terms of `t Hooft's fractional instanton
amplitudes.Comment: Latex file. 11 pages. Typos corrected. Section on QCD has been
rewritten, clarifying some points, and a reference has been added. Final
version to appear at Int. Jour. Mod. Phys.