This presentation reviews both past achievements and recent developments of terahertz sources and applications and discusses the limitations to achieving and possible solutions to more powerful and compact sources. Particular emphasis are placed on scientific and fundamental applications that require such sources. The development of suitable detector technology for use in the terahertz region has enjoyed major advances in the last few years; however for terahertz frequency systems, it is the terahertz source development and implementation that has not been able to keep pace and has fallen behind the detector development curve. This paper focuses on compact, efficient, and potentially portable terahertz and millimeter wave devices and systems for a variety of commercial requirements and applications. In addition to atmospheric environment remote sensing and spectroscopy, the terahertz regime has a number of potential applications. These potential applications include communications, explosives and chemical agent detection, near object detection, and material imaging that benefits from new technology in this part of electromagnetic spectrum. Recent developments and activities for these potential applications are discussed.