Shape Deposition Manufacturing (SDM) is a solid freeform fabrication (SFF) methodology for automatically building up material layers to form three-dimensional, complex-shaped, multi-material structures. Microcasting is a molten metal droplet deposition process which is able to create fully dense metal layers with controlled microstructures. SDM combines microcasting with other intermediate processing operations, such as CNC machining and shot peening, to create high quality metal parts. A description is given of SDM and the microcasting process. An overview of thermal and mechanical issues associated with SDM and microcasting is given, including the control of inter-layer metallurgical bonding through substrate remelting, the control of cooling rates of both the substrate and the deposited material and the minimization of residual thermal stress effects. Thermal models are used to study the issue of localized remelting of previously deposited material by newly deposited molten droplets to achieve metallurgical bonding. Mechanical modeling provides insight into stress build-up during part manufacture and residual stress-driven debonding between depsoited layers.