The density-wave theory of galactic spirals is developed in a form slightly more general than that outlined by Lin and Shu in an earlier short communication. Only self-sustained waves are studied in this paper, and the problem of the origin of the spiral structure is barely discussed. The implications of the theory are examined, both in general terms and in detail. The conclusions are compared with observations. Specifically, we consider (1) the distribution of atomic hydrogen in the Galaxy, (2) the systematic motion of the gas, (3) the distribution of young stars and other optical objects, and (4) the migration of moderately young stars. Good agreements are obtained in all cases if we adopt a pattern speed of about 13 km sec-1 kpc-1, and a spiral gravitational field equal to about 5 per cent of the symmetrical field. General discussions are also given on (a) the structure of the magnetic field and its role on the systematic motion of the gas, (b) the role of the density wave in the process of star formation, and (c) the distribution of H II regions as revealed by the 109a radio observations.