Traditional materials have serious deficiencies in meeting requirements for thermal management and minimization of thermal stresses in high-power laser diode packaging. Copper, the standard material for applications requiring high thermal conductivity, has a coefficient of thermal expansion (CTE) that is much larger than those of ceramics and laser diodes, giving rise to thermal stresses when packages are subjected to thermal excursions. Traditional materials with low CTEs have thermal conductivities that are little or no better than that of aluminum. There are an increasing number of new packaging materials with low, tailorable CTEs and thermal conductivities up to four times those of copper that overcome these limitations. The ability to tailor material CTE has been used to solve critical warping problems in manufacturing, increasing yield from 5% to over 99%. Advanced materials fall into six categories: monolithic carbonaceous materials, metal matrix composites, carbon/carbon composites, ceramic matrix composites, polymer matrix composites, and advanced metallic alloys. This paper provides an overview of the state of the art of advanced packaging materials, including their key properties, state of maturity, using composites to fix manufacturing problems, cost and applications.