First principles orab initiocalculations are now routinely applied to problems in physics, chemistry and minerals science. These calculations are now even being applied to biological systems. However, the number of applications of such calculations in materials science remains relatively low. This is somewhat surprising given the system sizes and complexities that are amenable to modern first principles calculations. In this paper I shall discuss some of the challenges of materials science in order to explain why first principles calculations alone will have very little impact on materials modeling. I shall also highlight some successful applications of first principles calculations to materials problems and outline possible developments that would significantly extend the range of successful applications in the future. ©2001 American Institute of Physics.