Next-generation X-ray sources, based on the X-ray Free Electron Laser (XFEL) concept, will provide highly coherent, ultrashort pulses of soft and hard X-rays with peak intensity many orders of magnitude higher than that of a synchrotron. These pulses will allow studies of femtosecond dynamics at nanometer resolution and with chemical selectivity. They will produce diffraction images of organic and inorganic nanostructures without deleterious effects of radiation damage.