The physics of active galactic nuclei and related objects is one of the most actively pursued areas of astrophysics.Their large luminosities over the entire electromagnetic spectrum combined with extremely short time variability has stimulated a large number of astrophysicists to propose rather unconventional ideas. A variety of radiation mechanisms such as thermal,synchrotron and Compton processes have been proposed to account for the complex continuum emission.It is only recently that the role of plasma radiation mechanism has been shown to be important.It is demonstrated how a combination of the stimulated Raman and Compton scattering processes accounts for the major part of the spectrum taking 3C 273 as an example.In addition plasma mechanisms for, the heating of the emission line regions, absorption of 21Cm radiation, producing time variability on different time scales and pair production and pair annihilation are also discussed.