Quantum technologies exploit entanglement to revolutionize computing, measurements, and communications. This has stimulated the research in different areas of physics to engineer and manipulate fragile many-particle entangled states. Progress has been particularly rapid for atoms. Thanks to the large and tunable nonlinearities and the well-developed techniques for trapping, controlling, and counting, many groundbreaking experiments have demonstrated the generation of entangled states of trapped ions, cold, and ultracold gases of neutral atoms. Moreover, atoms can strongly couple to external forces and fields, which makes them ideal for ultraprecise sensing and time keeping. All these factors call for generating nonclassical atomic states designed for phase estimation in atomic clocks and atom interferometers, exploiting many-body entanglement to increase the sensitivity of precision measurements. The goal of this article is to review and illustrate the theory and the experiments with atomic ensembles that have demonstrated many-particle entanglement and quantum-enhanced metrology.