We discuss a two-loop calculation showing that the S matrix of Einstein's theory of gravity contains nonrenormalizable ultraviolet divergences in four dimension. We discuss the calculation in both background field and normal field theory. We describe a new method for dealing with ghost fields in gauge theories by combining them with suitable extensions of the gauge fields in higher dimensions. We show how using subtracted integrals in the calculation of higher loop graphs simplifies the calculation in the background field method by eliminating the need for "mixed" counterterms. Finally, we make some remarks about the implications of our result for supergravity theories.
