We review some of the main applications of the renormalization‐group technique in condensed matter physics. The first relevant example is the description of critical phenomena. Here perturbation theory is affected by singularities, which are a consequence of the long‐ranged character of the dominant fluctuations when approaching criticality. The use of renormalization group allows to sum up these singularities into a power‐law behavior of the physical quantities, which is experimentally observed near a continuous phase transition. The second example is provided by the description of the physical properties of interacting Fermi and Bose systems. Here perturbation theory is affected by infrared divergences within stable liquid phases, due to the presence of massless excitations, in reduced dimensionality. However, the condition of stability of the system implies exact cancellations among the singular contributions, controlled by additional Ward identities, which must be considered besides the standard Ward identities related to the conservation of the total particle and spin density. The combined use of renormalization group and these new Ward identities allows for the closure of the renormalization‐group equations, leading to the description of the asymptotic behavior of the system at low energies. © 2002 American Institute of Physics