We present an approach to knowledge compilation that transforms a function-free first-order Horn knowledge base to propositional logic. This form of compilation is important since the most efficient reasoning methods are defined for propositional logic, while knowledge is most conveniently expressed within a first-order language. To obtain compact propositional representations, we employ techniques from (ir)relevance reasoning as well as theory transformation via unfold/fold transformations. Application areas include diagnosis, planning, and vision. Preliminary experiments with a hypothetical reasoner indicate that our method may yield significant speedups. This paper is an improved and significantly extended version of Prendinger and Ishizuka [22]. 1