Compliant substrates offer a new approach to strain management in lattice-mismatched structures. The role of the compliant substrate is to reduce the strain in a mismatched overlayer by sharing the strain via deformation of the substrate, or by nucleating and confining defects in the substrate. This can be accomplished by using a thin, "free-standing" substrate. Current efforts are primarily focused on the specification, design, and, fabrication of an "ideal" compliant substrate. Key processing issues include; the etching of the substrate and the bonding, of the substrate to a mechanical handle wafer. Dramatically reduced dislocation densities, as well as reduced relaxation rates, have been observed for the growth of mismatched overlayers on compliant substrates.