Current knowledge of the structure of AGNs and the physical principles that govern them are reviewed along with clues as to their formation and evolution. Evidence from optical observational data is stressed, but the importance of radio, millimeter, infrared, ultraviolet, and X-ray results is also emphasized. Overall, AGNs form one family, but there are many differences in detail among them. Spectral classification of AGNs is reviewed. Diagnostic diagrams involving optical and near-infrared emission-line ratios to separate AGNs from H II regions or starburst galaxies are briefly discussed Observed jets indicate that many, if not all, AGNs have an axis, and that cylindrical rather than spherical symmetry governs them. The central source is very probably an accretion disk around a massive black hole, and photoionization by high-energy photons is an important energy-input mechanism to the observed gas. The photoionizing spectrum is a hard one, generally more complicated than a simple power law. There is considerable evidence, especially from spectropolarimetry, that many Seyfert 2 galaxies contain a broad-line region, hidden within an obscuring torus, and would be observed as Seyfert 1 galaxies from a different orientation. At high luminosities there are essentially no Seyfert 2 galaxies, indicating that the obscuring torus is very thin or cannot exist under these conditions, or that the nuclear radiation is highly anisotropic. The velocity field in AGNs includes rotation and '' turbulence '' (disordered motion) in the broad-line region. There may also be inflow and outflow (or both, in different parts of the BLR), but if so its net amount is small. In both the BLR and the NLR axial symmetry is a better approximation than spherical symmetry, but the structure no doubt is warped in many objects, with the axis shifting from the direction of the jet in the inner BLR to the direction of the normal to the galaxy in the outer NLR. High-resolution long-slit spectral observation suggests the flow in the NLR tends to be outward along the axis, perhaps with a conical distribution, but rotational in the equatorial region, perhaps with an inward component. Star formation occurs near many but not all AGNs. Dust is certainly present in many if not all AGNs, and heated by radiation it is an important source of infrared emission. Black holes appear to exist in several nearby inactive galactic nuclei. Statistical studies and recent imaging studies have suggested that many if not all AGNs form or are reactivated in galaxy-galaxy interactions, including both mergers and close passages. Theoretical calculations are beginning to show how some of the gas in a galaxy can lose sufficient angular momentum to fall nearly to a nucleus as a consequence Of such interactions, and thus become available as fuel. In general the evolution is expected to occur in bursts of activity, each decreasing to zero as the available fuel is exhausted and then restarting after the next interaction at a higher luminosity, made possible by the now higher black hole mass.