This report reviews the developing field of ion-beam technology that employs accelerated ions consisting of clusters of a few hundreds to thousands of atoms (gas cluster ion-beam technology, GCIB). Cluster ion-surface collisions have been found to produce low-energy bombardment effects at very high density, and GCIB processes exhibit unique nonlinear effects that are useful for surface processing applications. The effects include low-energy ion bombardment, lateral sputtering, and low-temperature thin-film formation. GCIB processing has been applied to shallow junction formation; high rate etching; surface smoothing of materials including metals, dielectrics, superconductors, and diamonds; and high-k oxide and diamond-like carbon thin-film deposition. We describe the unique characteristics of GCIB-surface interactions and GCIB process applications for (i) ultrashallow junction formation and doping in Si, (ii) surface smoothing of metals, (iii) selective smoothing of silicon-on-insulator SiC, and other compound semiconductor films, (iv) integrated circuit back-end-of-the-line processing, and (v) high-quality multilayer thin-film formation for reliable and durable optical filters. (c) 2005 American Vacuum Society.