A mass and energy selected ion beam source, differentially pumped for ultrahigh vacuum (UHV) applications, was constructed and successfully tested. Ions with a mass up to 2048 amu and with energies of 5-500 eV can be selected from a Penning discharge chamber by a quadrupole massfilter and an electrostatic lens system. The ion gun is operated in combination with a VG ESCALAB spectrometer for x-ray photoelectron spectroscopy and diffraction working at a base pressure in the 10(-11) mbar range. Two applications of low energy ion bombardment are discussed in this article : etching of PMMA with 5 eV Ar+ ions, and deposition of alpha-C:H films on silicon. Ar+ ions at very low energies can react with a PMMA surface by a charge exchange reaction leading to a breakup of chemical bonds and to the preferential etching of oxygen. By depositing CHx ions (x=3,4) on a silicon surface under UHV conditions an oriented SiC layer is formed upon annealing at 800 degrees C. The ion beam was characterized with respect to mass and energy resolution and beam spreading for different ion energies.