We consider the satisfiability problem for modal logic over classes of structures definable by universal first-order formulas with three variables. We exhibit a simple formula for which the problem is undecidable. This improves an earlier result in which nine variables were used. We also show that for classes defined by three-variable, universal Horn formulas the problem is decidable. This subsumes decidability results for many natural modal logics, including T, B, K4, S4, S5.