The notion of using electron spins as bits for highly efficient computation coupled with non-volatile data storage has driven an intense international research effort over the past decade. Such an approach, known as spin-based electronics or spintronics, is considered to be a promising alternative to charge-based electronics in future integrated circuit technologies. Many proposed spin-based devices, such as the well-known spin-transistor, require injection of spin polarized currents from ferromagnetic layers into semiconductor channels, where the degree of injected spin polarization is crucial to the overall device performance. Several ferromagnetic Heusler alloys are predicted to be half-metallic, meaning 100% spin-polarized at the Fermi level, and hence considered to be excellent candidates for electrical spin injection. Furthermore, they exhibit high Curie temperatures and close lattice matching to III-V semiconductors. Despite their promise, Heusler alloy/semiconductor heterostructures investigated in the past decade have failed to fulfill the expectation of near perfect spin injection and in certain cases have even demonstrated inferior behavior compared to their elemental ferromagnetic counterparts. To address this problem, a slew of theoretical and experimental work has emerged studying Heusler alloy/semiconductor interface properties. Here, we review the dominant prohibitive materials challenges that have been identified, namely atomic disorder in the Heusler alloy and in-diffusion of magnetic impurities into the semiconductor, and their ensuing detrimental effects on spin injection. To mitigate these effects, we propose the incorporation of half-metallic Heusler alloys grown at high temperatures (>200 °C) along with insertion of a MgO tunnel barrier at the ferromagnet/semiconductor interface to minimize magnetic impurity in-diffusion and potentially act as a spin-filter. By considering evidence from a variety of structural, optical, and electrical studies, we hope to paint a realistic picture of the materials environment encountered by spins upon injection from Heusler alloys into semiconductors. Finally, we review several emerging device paradigms that utilize Heusler alloys as sources of spin polarized electrons.