Entanglement is one of the key resources required for quantum computation, so experimentally creating and measuring entangled states is of crucial importance in the various physical implementations of a quantum computer. In superconducting qubits, two-qubit entangled states have been demonstrated and used to show violations of Bell's Inequality and to implement simple quantum algorithms. Unlike the two-qubit case, however, where all maximally-entangled two-qubit states are equivalent up to local changes of basis, three qubits can be entangled in two fundamentally different ways, typified by the states $|\mathrm{GHZ}> = (|000> + |111>)/\sqrt{2}$ and $|\mathrm{W}> = (|001> + |010> + |100>)/\sqrt{3}$. Here we demonstrate the operation of three coupled superconducting phase qubits and use them to create and measure $|\mathrm{GHZ}>$ and $|\mathrm{W}>$ states. The states are fully characterized using quantum state tomography and are shown to satisfy entanglement witnesses, confirming that they are indeed examples of three-qubit entanglement and are not separable into mixtures of two-qubit entanglement.