In this paper we propose a solution to an unsolved problem in solid state physics, namely, the nature and structure of the glass transition in amorphous materials. The development of dynamic percolating fractal structures near T g is the main element of the Twinkling Fractal Theory (TFT) presented herein and the percolating fractal twinkles with a frequency spectrum F(x) $ x df-1 exp À|DE|/kT as solid and liquid clusters interchange with frequency x. The Orbach vibrational density of states for a fractal is g(x) $ x df-1 , where d f ¼ 4/3 and the temperature dependent activation energy behaves as DE $ (T 2 À T 2 g ). The key concept of the TFT derives from the Boltzmann population of excited states in the anharmonic intermolecular potential between atoms, coupled with percolating solid fractal structures near T g . The twinkling fractal spectrum F(x) at T g predicts the correct dynamic heterogeneity behavior via the spatio-temporal thermal fluctuation autocorrelation relaxation function C(t). This function behaves as C(t) $ t À1/3 (short times), C(t) $ t À4/3 (long times) and C(t) $ t À2 (x \ x c ), which were found to be in excellent agreement with published nanoscale AFM dielectric force fluctuation experiments on a glassy polymer near T g . Using the Morse potential, the TFT predicts that T g ¼ 2D o /9k, where D o is the interatomic bonding energy $ 2-5 kcal/mol and is comparable to the heat of fusion DH f . Because anharmonicity controls both the thermal expansion coefficient a L and T g , the TFT uniquely predicts that a L ÂT g % 0.03, which is found to be universal for a broad range of glassy materials from Pyrex to polymers to glycerol. Below T g , the glassy structure attains a frustrated nonequilibrium state by getting constrained on the fractal structure and the thermal expansion in the glass is reduced by the percolation threshold p c as a g % p c a L . The change in heat capacity DC p ¼ C pL -C pg at T g was found to be related to the change in dimensionality from D f to 3 in the Debye approximation as the ratio C pL /C pg ¼ 3/D f , where D f is the fractal dimension of the glass. For polymers, the TFT describes the molecular weight dependence of T g , the role of crosslinks on T g , the Flory-Fox rule of mixtures and the WLF relation for the time-temperature shift factor a T , which are traditionally viewed in terms of Free-Volume theory. The TFT offers new insight into the behavior of nano-confined glassy materials and the dynamics of physical aging. It also predicts the relation between the melting point T m and T g as T m /T g ¼ 1/[1Àp c ] % 2. The TFT is universal to all glass forming liquids.