Recent observational studies of the properties of binary systems among young stars indicate that the majority of binaries are formed very early in the history of a star, perhaps during the protostellar collapse. Major observational facts to be explained include the overall binary frequency, the non-negligible occurrence of multiple systems, and the distributions of period, eccentricity, and mass ratio among the individual binaries. Theoretical calculations of the collapse of rotating protostars during the isothermal phase indicate instability to fragmentation into multiple systems. This process in general produces systems with periods greater than a few hundred years, although somewhat shorter periods are possible. Fragmentation during later, optically thick, phases of collapse tends to be suppressed by pressure effects. Therefore, major theoretical problems remain concerning the origin of close binaries. Fission of rapidly rotating stars, tidal capture, and three-body capture have been shown to be improbable mechanisms for formation of close binaries. Mechanisms currently under study include gravitational instabilities in disks, orbital interactions and disk-induced captures in fragmented multiple systems, hierarchical fragmentation, and orbital decay of long-period systems. Single stars, on the other hand, could result by escape from multiple systems or by the collapse of clouds of low angular momentum, coupled with angular momentum transport after disk formation.