Pulsed Nd:YAG lasers have been developed to achieve high peak power and high pulse repetition rate. These systems are being used as drivers for laser-produced plasmas which efficiently convert the 1064-nm laser output to extreme ultraviolet (EUV) light at 13.5 nm for future microlithography systems. The requirements for laser-produced plasma EUV light sources and their integration in lithography tools for high-volume manufacturing are reviewed to establish the key design issues for high-power lasers and plasma targets. Xenon has been identified as a leading target material to realize the goals of intense EUV emission and clean operation. Recent progress in high-power diode-pumped Nd:YAG lasers and xenon targets for EUV generation is reviewed, showing that laser-produced plasma sources meet the needs for current EUV lithography development tools. Future directions to meet EUV source requirements for high-volume manufacturing tools are discussed.