In distributed networks, one major security drawback is to identify the legitimate remote users of a web service on the Internet. To eliminate this security problem, many researchers have been proposed smart card based remote user authentication for secure communication in wireless networks. The wireless networks mostly use password based protocols that are based on two factors-smart card and PIN. But, this type of authentication protocols are susceptible to password guessing attack, stolen verifier attack, replay attack etc. In this paper, we propose a three factor based mutual authentication protocol using smart card in distributed networks, which resists all possible attacks. This protocol is suitable for hand held devices due to the low computational and communicational cost.