Owing to its many optical and physical advantages for fluorescence excitation, multi-photon microscopy has found a wide range of uses in biology, both in structural and functional studies. In this review we highlight various applications of this technique in different fields of cell physiology and biophysical research. This includes studies on second messenger and ionic signals, on cellular metabolism as well as on genetically engineered probes and indicators. In addition, this techniques has been successfully applied for diffraction-limited photolysis of caged compounds. We also point out some of the problems that were encountered along the still rapidly evolving path of this technique, and draw attention to some of the ongoing developments that will further extend and improve the usefulness of multi-photon excitation, such as fluoresce life-time imaging (FLIM), fluorescence resonance energy transfer (FRET) and entangled photon microscopy approaches.