The study results on highly functional carbon related materials are reported as a part of the leading research in fiscal 1996. Synthesis of these novel materials is outlined, and R & D results on the following materials are described: diamond, hetero-diamond, graphite, amorphous carbon, carbyne, fullerences, carbon nitride and chemically modified carbon materials. Their issues, future possibility and market in 2010 are also described. The markets are predicted of such electronic materials as electronic emitter, sensor, solid device and heat sink, such optical materials as X-ray lithography, and such chemical materials as electrode and catalyst. Promising characteristics of light-weight and high-hardness machine materials are presented, and some issues such as material synthesis, and intensive machining and application technologies are described. The future markets are predicted of their applications to tools, dies, information equipment, glass, automobiles, aircraft, spacecraft and industrial machines. Problems and their break through techniques of these novel materials are also presented. 220 refs., 68 figs., 16 tabs.