Nanoparticles, smaller than 100 nm, have many properties which differ from the corresponding bulk material thereby making them attractive for many new electronic, optical or magnetic applications. They can be used for these functional applications in the form of granular films, nanocomposites or nanophase materials. In this review, the main applications of current interest will be dealt with including some discussions of the underlying phenomena. These applications include quantum dots, luminescent materials, gas sensors, resistors and varistors, conducting and capacitive films, high-temperature superconductors, and thermoelectrical, optical and magnetic materials. In the second part, various experimental techniques for synthesizing nanoparticles in the gas phase are described. Finally, the works on nanoparticle synthesis in the gas phase aiming at any of the above mentioned functional applications is reviewed.