Cluster algebras III: Upper bounds and double Bruhat cells

We develop a new approach to cluster algebras, based on the notion of an upper cluster algebra defined as an intersection of Laurent polynomial rings. Strengthening the Laurent phenomenon established in [7], we show that under an assumption of ``acyclicity,'' a cluster algebra coincides with its upper counterpart and is finitely generated; in this case, we also describe its defining ideal and construct a standard monomial basis. We prove that the coordinate ring of any double Bruhat cell in a semisimple complex Lie group is naturally isomorphic to an upper cluster algebra explicitly defined in terms of relevant combinatorial data.