Multiphoton interference reveals strictly nonclassical phenomena. Its applications range from fundamental tests of quantum mechanics to photonic quantum information processing, where a significant fraction of key experiments achieved so far comes from multiphoton state manipulation. The progress, both theoretical and experimental, of this rapidly advancing research is reviewed. The emphasis is given to the creation of photonic entanglement of various forms, tests of the completeness of quantum mechanics (in particular, violations of local realism), quantum information protocols for quantum communication (e.g., quantum teleportation, entanglement purification, and quantum repeater), and quantum computation with linear optics. The scope of the review is limited to “few-photon” phenomena involving measurements of discrete observables.