We discuss recent developments in the study of the interaction of intense l
asers with diatomic molecules. An overview of theory and experiment is give
n and particular attention is given to the energy spectra of ions resulting
from photodissociative ionization. The ionization process is studied in th
e multiphoton regime using Floquet theory and compared with field-ionizatio
n results appropriate for the tunnelling regime. A review is given of the e
vidence for the existence of critical distances between the nuclei at which
ionization rates are strongly enhanced. The field-ionization model is foun
d to reproduce the main features observed by experiments. The field-ionizat
ion Coulomb explosion (FICE) model accurately reproduces the kinetic energy
releases and threshold intensities of the various fragmentation channels o
f the iodine dimer: I-2. With the three-dimensional FICE model, threshold i
ntensities as a function of angle between the molecular axis and the laser
E-field are calculated. The angular distributions obtained are in good agre
ement with measurements taken for distributions of I-2 fragments. The angul
ar distributions of the H-2 and N-2 fragments, on the other hand, are much
more sharply peaked, indicating reorientation by the laser field.