Phonons, i.e., quanta of lattice vibrations, manifest themselves practically in all electrical, thermal, optical, and noise phenomena in semiconductors and other material systems. Reduction of the size of electronic devices below the acoustic phonon mean free path creates a new situation for the phonons propagation and interaction. From one side, it may complicate heat removal from the down-scaled devices. From the other side, it opens up an opportunity for engineering phonon spectrum in nanostructured materials, and achieving enhanced operation of nanoscale devices. This chapter reviews the development of the nanoscale phonon engineering concept and discusses possible device applications. The focus of this review is on tuning the phonon spectrum in the acoustically mismatched nano- and heterostructures in order to change the ability of semiconductors to conduct heat or electric current. New approaches for the electron-phonon scattering rates suppression and improvement of the carrier mobility as well as for formation of the phonon stop-bands are discussed. The phonon engineering concept can be potentially as powerful as the band gap engineering, which led to some around-breaking developments in the electronics.