Silicon has long been established as the material of choice for the microelectronics industry. This is not yet true in photonics, where the limited degrees of freedom in material design combined with the indirect bandgap are a major constraint. Recent developments, especially those enabled by nanoscale engineering of the electronic and photonic properties, are starting to change the picture, and some silicon nanostructures now approach or even exceed the performance of equivalent direct-bandgap materials. Focusing on two application areas, namely communications and photovoltaics, we review recent progress in silicon nanocrystals, nanowires and photonic crystals as key examples of functional nanostructures. We assess the state of the art in each field and highlight the challenges that need to be overcome to make silicon a truly high-performing photonic material.