Recent materials research has advanced the maximum ferromagnetic transition temperature in semiconductors containing magnetic elements toward room temperature. Reaching this goal would make information technology applications of these materials likely. In this article we briefly review the status of work over the past five years which has attempted to achieve a theoretical understanding of these complex magnetic systems. The basic microscopic origins of ferromagnetism in the (III,Mn)V compounds that have the highest transition temperatures appear to be well understood, and efficient computation methods have been developed which are able to model their magnetic, transport, and optical properties. However many questions remain. (C) 2003 Published by Elsevier B.V.