Recent developments in the art and technology of strained layer epitaxial systems are reviewed. This interest stems primarily from the additional degree of freedom that strained layers provide in the design of technologically important heterostructures and devices. This added degree of freedom has already led to device structures that can be tailored to a particular application with, in many cases, performances that are unparalleled and out of reach with lattice-matched systems alone. To date, modulation-doped field-effect transistors (MODFET's) fabricated with strained InGaAs channels on GaAs and InP substrates have shown superior performance over their counterparts with lattice-matched channels. MODFET's with unprecedented performance, e.g., a power gains of 7.3 dB at 140 GHz and a noise level of 1.4 dB in the 90-GHz range have been fabricated. With the advent of SiGe alloys, the concept of strained layers was recently extended to include the elemental semiconductors as well. Heterojunctions formed in the Si/SiGe system have provided a laboratory in which to study quantum phenomena and explore heterojunction bipolar transistors (HBT's) and field-effect transistors (FET's). SiGe HBT's have already exhibited current gains in excess of 5000, current gain cutoff frequencies f(T) of about 75 GHz, and 24-ps switching times. Of particular significance are the recent reports of enhanced mobilities in strained SiGe and strained Si with applications to high-speed complementary metal-oxide-semiconductor (CMOS) circuits. In the area of optoelectronics, quantum well lasers with compressively strained InGaAs active layers have led to considerable reduction the threshold current density. Both compressive and tensile strains have been shown to lead to reduced threshold currents owing to favorable alterations in the valence-band structure. With coherently strained active layers based on GaAs, lasers with longevities superior to those with lattice-matched channels have been obtained. With strained channels the 0.98-mum wavelength radiation can be produced with important applications to Er-doped fiber amplifiers. Strained layer concepts have also been successfully used in yellow and green lasers made in InGaAlP and ZnCdSe/ZnSSe, respectively.