The production of c and b quarks γγ collisions is studied with the L3 detector at LEP with 410 pb−1 of data, collected at centre-of-mass energies from 189 GeV to 202 GeV. Hadronic final states containing c and b quarks are identified by detecting electrons or muons from their semileptonic decays. The cross sections σ (e+e-→e+e-ccX) and σ (e+e-→e+e-bbX) are measured and compared to next-to-leading order perturbative QCD calculations. The cross section of b production is measured in γγ collisions for the first time. It is in excess of the QCD prediction by a factor of three