The reference abundance of the interstellar medium (the abundance of elements in gas+dust), until recently assumed to be solar, is discussed because of its great importance for the composition of dust. For some important elements (O, N, and probably more), three lines of reasoning (observed gas-phase abundances, HII regions, and stellar abundances) suggest that the reference abundance is only ~70% of solar. Carbon is especially crucial. This change in the reference abundance, coupled with recently observed gas-phase abundances of C, present grain theories with a major challenge. Diagnostics of the nature of dust are considered, with emphasis on continuous interstellar extinction, the carriers of the 217.5 nm feature, some infrared extinction features, and the Unidentified Infrared Bands in the range 3.28 &mgr;m≤&lgr;≤11.3 &mgr;m. Laboratory materials have provided important data. The low abundance of carbon in dust probably requires that the carriers of the 217.5-nm feature have the same distribution of shapes in all directions. There are comments about grain theories and the implications of observed gas-phase abundances in cool and warm interstellar clouds. ¿ 2000 American Geophysical Union