We show that quantum systems of extended objects naturally give rise to a large class of exotic phases---namely topological phases. These phases occur when extended objects, called ``string-nets,'' become highly fluctuating and condense. We construct a large class of exactly soluble 2D spin Hamiltonians whose ground states are string-net condensed. Each ground state corresponds to a different parity invariant topological phase. The models reveal the mathematical framework underlying topological… Expand