A technique called graphical condensation is used to prove various combinatorial identities among numbers of (perfect) matchings of planar bipartite graphs and tilings of regions. Graphical condensation involves superimposing matchings of a graph onto matchings of a smaller subgraph, and then re-partitioning the united matching (actually a multigraph) into matchings of two other subgraphs, in one of two possible ways. This technique can be used to enumerate perfect matchings of a wide variety of planar bipartite graphs. Applications include domino tilings of Aztec diamonds and rectangles, diabolo tilings of fortresses, plane partitions, and transpose complement plane partitions.