An algorithm for computing the propagator for three-dimensional quadratic gravity with a gravitational Chern-Simons term, based on an extension of the three-dimensional Barnes-Rivers operators, is proposed. A systematic study of the tree-level unitarity of this theory is developed and its agreement with Newton's law is investigated by computing the effective nonrelativistic potential. (C) 2000 Elsevier B.V. B.V. All rights reserved.