In this chapter, which forms the central chapter of Part II, the effective action of quantum matter fields in curved spacetime is formulated in terms of functional integrals. A qualitative, albeit incompletely conclusive, analysis of divergences and renormalization in curved space is given. Both non-covariant and covariant methods of calculations are discussed. Normal coordinates and local momentum representation are used to derive the effective potential. The basic elements of the Schwinger-DeWitt technique are elaborated in detail, resulting in the general formulas for one-loop divergences. The heat-kernel technique is also discussed.