The role of spontaneous and piezoelectric polarization in III-V nitride heterostructures is investigated. Polarization effects and crystal polarity are reviewed in the context of nitride heterostructure materials and device design, and a detailed analysis of their influence in nitride heterostructure field-effect transistors is presented. The combined effects of spontaneous and piezoelectric polarization are found to account well for carrier concentrations observed in AlGaN/GaN transistor structures with low to moderate Al concentrations, while the data for higher Al concentrations are consistent with defect formation in the AlGaN barrier. Theoretical analysis suggests that incorporation of In into the barrier and/or channel layers can substantially increase polarization charge at the heterojunction interface. The use of polarization effects to engineer Schottky barrier structures with large enhancements in barrier height is also discussed, and electrical characteristics of transistors with conventional and polarization-enhanced Schottky barrier gates are presented. The polarization-enhanced barrier is found to yield a marked reduction in Sate leakage current, but to have little effect on transistor breakdown voltage.