We apply a differential renormalization method to the study of three-dimensional topologically massive Yang-Mills and Chern-Simons theories. The method is especially suitable for such theories as it avoids the need for dimensional continuation of a three-dimensional antisymmetric tensor and the Feynman rules for three-dimensional theories in coordinate space are relatively simple. The calculus involved is still lengthy but not as difficult as other existing methods of calculation. We compute one-loop propagators and vertices and derive the one-loop local effective action for topologically massive Yang-Mills theory. We then consider Chern-Simons field theory as the large mass limit of topologically massive Yang-Mills theory and show that this leads to the famous shift in the parameter k. Some useful formulas for the calculus of differential renormalization of three-dimensional field theories are given in an Appendix.
