Gamma-ray emission from AGN provides us with unprecedented insights into the physics of extragalactic jets. The emission from these jets fits naturally into the existing theoretical framework of relativistic jets as inferred from parsec scale and kiloparsec scale observations. Models of the γ-ray fluxes give us important knowledge of jet parameters, in particular magnetic fields and the size of the emitting region. For example, in the case of Markarian 501, the jet plasma is subequipartiion and

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... the energy flux is particle dominated. Discussion of the physics of jets on the sub-parsec scale leads naturally to questions of jet composition. The dynamics of jets are consistent with conventional electron-proton composition if the minimum Lorentz factors, γ_ min > 100. Jets can be electron-positron if γ_ min≈ 100.