This Perspective provides an overview of state-of-the-art ab initio quantum chemical methodology and applications. The methods that are discussed include coupled cluster theory, localized second-order Moller-Plesset perturbation theory, multireference perturbation approaches, and density functional theory. The accuracy of each approach for key chemical properties is summarized, and the computational performance is analyzed, emphasizing significant advances in algorithms and implementation over the past decade. Incorporation of a condensed-phase environment by means of mixed quantum mechanical/molecular mechanics or self-consistent reaction field techniques, is presented. A wide range of illustrative applications, focusing on materials science and biology, are discussed briefly.