The physical principles underlying the oscillatory behavior of minute gas bubbles in liquids exposed to ultrasound are reviewed. Results from mathematical analyses suggest that these oscillations sometimes become unstable leading to transient cavitation in which a bubble violently collapses during a single acoustic half-cycle producing high temperatures and pressures. The role that micronuclei, resonant bubble size, and rectified diffusion play in the initiation of transient cavitation is explained. Evidence to support these theoretical predictions is presented with particular emphasis on sonoluminescence which provides some non-chemical evidence for the formation of free radicals. Acoustic methods for conducting sonochemical investigations are discussed. In aqueous solutions transient cavitation initially generates hydrogen atoms and hydroxyl radicals which may recombine to form hydrogen and hydrogen peroxide or may react with solutes in the gas phase, at the gas-liquid boundary or in the bulk of the solution. The analogies and differences between sonochemistry and ionizing radiation chemistry are explored. The use of spin trapping and electron spin resonance to identify hydrogen atoms and hydroxyl radicals conclusively and to detect transient cavitation produced by continuous wave and by pulsed ultrasound is described in detail. The study of the chemical effects of cavitation in organic liquids is a relatively unexplored area which has recently become the subject of renewed interest. Examples of the decomposition of solvent and solute, of ultrasonically initiated free-radical polymerization and polymer degradation are presented. Spin trapping has been used to identify radicals in organic liquids, in polymer degradation and in the decomposition of organometallic compounds.