Manufacturing processes that can create extremely small machines have been developed in recent years. Microelectromechanical systems (MEMS) refer to devices that have characteristic length of less than 1 mm but more than 1 micron, that combine electrical and mechanical components and that are fabricated using integrated circuit batch-processing techniques. Electrostatic, magnetic, pneumatic and thermal actuators, motors, valves, gears and tweezers of less than 100 mm size have been fabricated. These have been used as sensors for pressure, temperature, mass flow, velocity and sound, as actuators for linear and angular motions, and as simple components for complex systems such as micro-heat-engines and micro-heat-pumps. The technology is progressing at a rate that far exceeds that of our understanding of the unconventional physics involved in the operation as well as the manufacturing of those minute devices. The primary objective of this paper is to critically review the status of our understanding of fluid flow phenomena particular to microdevices. Continuum as well as molecular approaches to the problem will be surveyed. A second objective is to discuss a novel pump/turbine suited for MEMS applications.