Abstract: This review surveys the physical principles and recent developments in manufacturing single-photon sources. Special emphasis is placed on important potential applications such as linear optical quantum computing (LOQC), quantum key distribution (QKD) and quantum metrology that drive the development of these sources of single photons. We discuss the quantum-mechanical properties of light prepared in a quantum state of definite photon number and compare it with coherent light that shows a Poissonian distribution of photon numbers. We examine how the single-photon fidelity directly influences the ability to transmit secure quantum bits over a predefined distance. The theoretical description of modified spontaneous decay, the main principle behind single-photon generation, provides the background for many experimental implementations such as those using microresonators or pillar microcavities. The main alternative way to generate single photons using postselection of entangled photon pairs from parametric down-conversion, will be discussed. We concentrate on describing the underlying physical principles and we will point out limitations and open problems associated with single-photon production.