Impurity ions with an orbitally degenerate ground-state electronic con
figuration embedded in metals are subject to both the Kondo effect and
the Jahn-Teller instability. While increasing the Jahn-Teller couplin
g one passes from the region of parameters where perturbation theory i
s applicable, through a complicated intermediate region, to a region w
here phonons, localized electrons, and conduction electrons form a coh
erent state.