Over the last two decades the processing method “Severe Plastic Deformation–SPD” has impressively demonstrated that nanostructured materials with superior mechanical properties can be produced ‘top-down’ in bulk shape which cannot be achieved with traditional ‘bottom-up’ methods. Now, the optimization of functional properties has been coming into the focus of the community’s research, not at least because of outstanding successes such as world-records in the figure-of-merit (ZT) of SPD-thermoelectrics, and in the reproducibility in the hydrogen storage of SPD-processed hydrogen storage materials. Recent investigations clearly suggest that a high density of SPD-induced lattice defects other than of classical grain boundaries can be equally or even more beneficial with respect to functional properties. For example, in case of thermoelectrics, SPD-induced dislocations and/or particular dislocation arrays seem to be most effective in increasing the ZT value. In several soft magnetic materials, regular dislocation arrays from SPD which form low-angle zero-strain nanocrystal boundaries promise new low-coercivity and high-magnetostriction materials. On the other hand, in the case of Mg-alloys, the vacancy-type defects produced in extremely high concentrations during SPD get a dominant role: They can achieve highly reversible absorption/desorption of hydrogen, but they also can cause considerable increases of strength after suitable thermal treatment. With the know-how to be obtained from systematic investigations, it should be possible to tailor specific defect structures on the nanoscale for optimum materials performances with very promising perspectives to practical application.