Forest hydrology studies the distribution, storage, movement, and quality of water and the hydrological processes in forest-dominated ecosystems. Forest hydrological science is regarded as the foundation of modern integrated water¬shed management. This chapter provides an overview of the history of forest hydrology and basic principles of this unique branch of hydrological sciences and forest ecology. Then, the chapter presents the general methodology and techniques that are widely used in forest hydrological investigations. A sum¬mary of key world-wide discoveries on the forest-water relations over the past century is presented as well as the progress made on the understanding of the forest-climate-water-people interactions. The perspectives of forest hydrology to solve environmental challenges in the twenty-first century are discussed.