The reaction $\gamma\gamma \rightarrow \pi^+\pi^-\pi^0$ has been studied with the L3 detector at LEP. The data collected at $e^+e^-$ centre-of-mass energies from 183 GeV to 209 GeV correspond to a total integrated luminosity of 682.6 pb$^{-1}$. The result of the full energy dependent partial wave analysis in the mass region 0.65 - 2.25 GeV is presented. The reaction is dominated by the $a_2$(1320) formation. Other resonance signals are also observed.