Chemists' fascination with dendrimers mainly originates from their unique architecture and its exploitation for the design of well‐defined functional macromolecules. Depending on the nature of the synthesis, functionalization is traditionally introduced at the core, the periphery, or both. However, the specific incorporation of functional groups at the interior layers, i.e., generations, represents a considerable synthetic hurdle that must be overcome for the full potential of dendrimers to be realized. This review covers recent advances in this emerging frontier of dendrimer science with a particular focus on covalent modifications. Monomer design, syntheses, and properties of various dendritic backbone types are discussed. Internal functionalization dramatically increases the degree of complexity that can be implemented into a dendrimer macromolecule and, therefore, promises to lead to smart materials for future applications in bio‐ and nanotechnologies. © 2003 Wiley Periodicals, Inc. J Polym Sci Part A: Polym Chem 41: 1047–1058, 2003