Abstract: Spectrum efficiency has long been at the center of mobile communication research, development, and operation. Today it is even more so with the explosive popularity of the mobile Internet, social networks, and smart phones that are more powerful than our desktops used to be not long ago. The discovery of spatial multiplexing via multiple antennas in the mid-1990s has brought new hope to boosting data rates regardless of the limited bandwidth. To further realize the potential of spatial multiplexing, the next leap will be accounting for the three dimensional real world in which electromagnetic waves propagate. In this article we discuss fundamentals and key technical issues in developing and realizing 3D multi-input multi-output technology for next generation mobile communications.