Kenneth T. Blaylock was elected today to a third two-year term as president of the American Federation of Government Employees. Blaylock got 102,198 votes. Challenger Karl Sadler, former legislative director of the union, ran a surprisingly strong race at this convention, picking up 93,229 votes. Fred Small, an AFGE local leader at the Pentagon, received 1,464 votes.

AFGE is the largest union in the federal service. It has about 300,000 dues-paying members and exclusive bargaining rights for more than 600,000 of the government's 2.7 million workers. It is the largest union, public or private, in metropolitan Washington.

Secretary-Treasurer Nicholas Nolan was reelected with 118,197 votes over challenger Robert Fletcher, who got 78,261.

In an upset, Barbara Hutchison, an attorney with the Equal Employment Opportunity Commission in Atlanta, defeated Louise Smothers, the incumbent director of the Women's affairs Department. Both women are black and both have been active in the fight to get a bigger share for women, who make up approximately 50 percent of the union membership. Hutchison led all the voting, picking up 123,943 votes and proxies compared to 72,625 for Smothers.

Blaylock appeared to be in trouble Tuesday when several top local leaders of the AFGE endorsed Sadler. Sadler, a longtime lobbyist and political fund-raiser, resigned from the big AFL-CIO union several weeks ago, charging it was being mismanaged and saying it had lost its political muscle on Capitol Hill.

Blaylock immediately pledged to begin a grass-roots building program for the AFGE, a program that is contingent on getting a substantial dues increase and getting more political freedom for federal workers now barred from partisan activities by the Hatch Act.

Blaylock is a member of the executive council of the AFL-CIO. He is one of the few AFL-CIO leaders who did not vote to recommend that organized labor endorse President Carter.