Understanding the microscopic structure and macroscopic properties of condensed matter from a molecular perspective is important for both traditional and modern chemical engineering. A cornerstone of such understanding is provided by statistical mechanics, which bridges the gap between molecular events and the structural and physiochemical properties of macro- and mesoscopic systems. With ever-increasing computer power, molecular simulations and ab initio quantum mechanics are promising to provide a nearly exact route to accomplishing the full potential of statistical mechanics. However, in light of their versatility for solving problems involving multiple length and timescales that are yet unreachable by direct simulations, phenomenological and semiempirical methods remain relevant for chemical engineering applications in the foreseeable future. Classical density functional theory offers a compromise: on the one hand, it is able to retain the theoretical rigor of statistical mechanics and, on the other hand, similar to a phenomenological method, it demands only modest computational cost for modeling the properties of uniform and inhomogeneous systems. Recent advances are summarized of classical density functional theory with emphasis on applications to quantitative modeling of the phase and interfacial behavior of condensed fluids and soft materials, including colloids, polymer solutions, nanocomposites, liquid crystals, and biological systems. Attention is also given to some potential applications of density functional theory to material fabrications and biomolecular engineering. (c) 2005 American Institute of Chemical Engineers.