Cadmium zinc telluride (CZT) is one of the most promising materials for the production of large-volume gamma-ray spectrometers and imaging arrays operable at room temperature. The performance of CZT devices, the global capacity for growth of detector-grade crystals, and the size of the commercial market have progressed steadily over the past 5-10 years. Because of deficiencies in the quality of the material, commercial high-resolution CZT spectrometers are still limited to relatively small dimensions (< 2-3 cm3), which makes them inefficient at detecting high photon energies (> 1 MeV) and somewhat ineffective for weak radiation signals except in proximity to the source. The detectors are very attractive for a much broader range of spectroscopic and imaging applications; however, increases in their efficiency are needed without sacrificing the ability to spectrally resolve gamma energies. Achieving the goal of low-cost efficient CZT detectors requires progress in the following areas: better uniformity of detector response, growth of large uniform single crystals, and improved device fabrication procedures. Despite the current material constraints, several types of electron-transport-only detectors have been developed: pixel, coplanar-grid, cross-strip, drift-strip, orthogonal coplanar strip, and virtual Frisch-grid, some of which are now addressing important applications. This talk summarizes the material factors limiting performance of CZT detectors and provides new insight into the critical role of small-scale defects (i.e., tellurium-rich inclusions) on the energy resolution and efficiency of detectors. Conclusive data demonstrating the relationship between Te precipitates (size, concentration, and spatial distribution) and the performance of CZT detectors are presented, together with a model of charge trapping for electrons transiting through areas populated with Te secondary phases.