In this thesis the method of self-similar continuous unitary transformations (CUTs) in real space is developed. It is applied to various models from the field of strongly correlated solid state physics and optical lattices. The CUT method maps a given Hamiltonian to an effective Hamiltonian which is in some respect simpler. In a self-similar CUT the truncation scheme relies on the structure of the operators. The real space approach put forward in this thesis truncates the operators according to their extension in real space. We mainly use a MKU generator to derive an effective model which is block-diagonal in the number of quasiparticles. We give a detailed description of the method. The transformation of the Hamiltonian and of the observables is explained. The implementation on a computer and the optimization of the programs are extensively discussed. The first application of the method deals with the fermionic Hubbard model. We derive an effective Hamiltonian, a generalized t-J-model, which conserves the number of doubly occupied sites. The effective model includes beyond the well-known Heisenberg term also further two-spin and four-spin terms. In addition, the charge motion and interaction within the effective model is addressed. In the context of the Hubbard model we discuss the question if an effective model that conserves the number of double occupancies can be derived in principle. The antiferromagnetic spin ladder and spin chain are treated from the viewpoint of a dimerized system. For the spin ladder we calculate the dispersion, the two-particle energies including bound states and the multi-particle continua. The discussion of multi-particle continua shows that the order of the energy levels is important for the convergence of the transformation. For the spin chain the dispersion is calculated. In addition, the transformation of an observable yields the corresponding spectral weights. The spectral weights are compared to results from a perturbative CUT. For the bosonic Hubbard model we calculate the dispersion and determine the phase diagram. The spectral weight of a certain observable is calculated in order to explain the outcome of a recent experiment that measures the spectroscopic response of atoms confined in optical traps. The distribution of spectral weight is analyzed also at finite temperatures. We find evidence for a substantial temperature of the size of the microscopic parameters. This finding is supported by purely thermodynamic considerations
