Quantum state engineering, i.e., active control over the coherent dynamics of suitable quantum mechanical systems, has become a fascinating perspective of modern physics. With concepts developed in atomic and molecular physics and in the context of NMR, the field has been stimulated further by the perspectives of quantum computation and communication. For this purpose a number of individual two-state quantum systems (qubits) should be addressed and coupled in a controlled way. Several physical realizations of qubits have been considered, incl. trapped ions, NMR, and quantum optical systems. For potential applications such as logic operations, nano-electronic devices appear particularly promising because they can be embedded in electronic circuits and scaled up to large numbers of qubits.Here we review the quantum properties of low-capacitance Josephson junction devices. The relevant quantum degrees of freedom are either Cooper pair charges on small islands or fluxes in ring geometries, both in the vicinity of degeneracy points. The coherence of the superconducting state is exploited to achieve long phase coherence times. Single-and two-qubit quantum manipulations can be controlled by gate voltages or magnetic fields, by methods established for single-charge systems or the SQUID technology. Several of the interesting single-qubit properties, incl. coherent oscillations have been demonstrated in recent experiments, thus displaying in a spectacular way the laws of quantum mechanics in solid state devices. Further experiments, such as entanglement of qubit states, which are crucial steps towards a realization of logic elements, should be within reach.In addition to the manipulation of qubits the resulting quantum state has to be read out. For a Josephson charge qubit this can be accomplished by coupling it capacitively to a single-electron transistor (SET). To describe the quantum measurement process we analyze the time evolution of the density matrix of the coupled system. As long as the transport voltage is turned off, the transistor has only a weak influence on the qubit. When the voltage is switched on, the dissipative current through the SET destroys the phase coherence of the qubit within a short time. The measurement is accomplished only after a longer time, when the macroscopic signal, i.e., the current through the SET, resolves different quantum states. At still longer times the measurement process itself destroys the information about the initial state. Similar scenarios are found when the quantum state of a flux qubit is measured by a dc-SQUID, coupled to it inductively.