The present status of quantum electrodynamics (QED) theory of highly charged ions is reviewed. The theoretical predictions for the binding energies, the hyperfine splittings, and the bound-electron g factors are compared with available experimental data. Special attention is focused on tests of QED at strong fields and determination of fundamental constants. The current status of studying the parity nonconservation effects with heavy atoms and ions is also discussed. The recent progress on calculations of charge-transfer and pair-creation processes in low-energy heavy ion collisions is reported.

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