The generally accepted notions about the formation mechanisms for germanium islands with nanometer-scale sizes in a Ge-on-Si system are reviewed on the basis of analysis of recent publications. The presence of elastic strains in the epilayers and in the three-dimensional Ge islands on Si is a key factor that not only initiates a morphological transition from a planar film to an island-containing film (the Stranski-Krastanov mechanism) but also influences the subsequent stages of the islands' evolution, including their shape, size, and spatial distribution. In many cases, this factor modifies appreciably the classical mechanisms of phase-forma- tion and their sequence up to the quasi-equilibrium coexistence of three-dimensional Ge nanoislands at the sur- face of the Si substrate. The methods for improving the degree of the ordering of nanoislands to attain the small- est possible sizes and large density of areal distribution of these islands are discussed. The published data on optical absorption in the multilayered Ge-Si systems with quantum dots are considered; these data are indica- tive of an anomalously large cross section of intraband absorption, which makes this class of nanostructures promising for the development of photodetectors of the infrared region of the spectrum. The results of original studies of electrical and optical properties of heterostructures that involve Ge quantum dots and are synthesized by molecular-beam epitaxy on the Si substrates are reported. © 2000 MAIK "Nauka/Interperiodica".