Only a few years ago, an account of degradation of silicon carbide high-voltage p-i-n diodes was presented at the European Conference on Silicon Carbide and Related Compounds (Kloster Banz, Germany, 2000). This report was followed by the intense effort of multiple groups utilizing varied approaches and subsequent progress in both fundamental understanding of this phenomenon and its elimination. The degradation of SiC p-i-n junctions is now well documented to be due to the expansion of Shockley-type stacking faults in the part of the devices reached by the electron-hole plasma. The faults can gradually cover most of the junction area, impeding current flow and, as a result, increasing the on-state resistance. While in most semiconductors stacking faults are electrically inactive, in hexagonal silicon carbide polytypes (4H- and 6H-SiC) they form quantum-well-like electron states observed in luminescence and confirmed by first-principles calculations. The stacking-fault expansion occurs via motion of 30° silicon-core partial dislocations. The Si–Si bond along the dislocation line induces a deep level in the SiC band gap. This state serves as both a radiative and a nonradiative recombination center and converts the electron-hole recombination energy into activation energy for the dislocation motion. Dislocation motion is typically caused by shear stress, but in the case of SiC diodes, the driving force appears to be intrinsic to the material or to the fault itself, i.e., the fault expansion appears to lower the energy of the system. Stable devices can be fabricated by eliminating stacking-fault nucleation sites. The dominant type of such preexisting defects is the segment of basal plane dislocations dissociated into partials. The density of such defects can be reduced to below 1cm−2 by conversion of all basal plane dislocations propagating from the substrate into threading ones in the epitaxial layer. Remarkable progress in fabrication of low basal plane dislocation density material offers hope of bipolar SiC devices being available commercially in the near future.