The forests comprise 26% of the world’s land surface area, encompassing distinct biotic communities which harbor rich biodiversity and provide diverse ecosystem services. The interaction between forest, water, and soil is multidimensional as forests provide canopy surfaces to intercept precipitation and allow evaporation back into the atmosphere. The mechanism of regulating the quantum of water reaching the forest floor as through fall and pull water from the soil for transpiration is the very basis of forest hydrology. The hydrological processes in forested watersheds are influenced by various environmental, and physiological factors such as precipitation, radiation, temperature, species type, leaf area, and extent and structure of forest ecosystems. Of late, the forest watersheds have been affected globally by anthropogenic activities such as forest harvesting, and conversion of forested landscapes for plantations and urbanization. As a result, hydrological processes in forested watersheds have been altered and these changes are expected to accelerate due to climate change phenomena. Hence, understanding the interaction of various environmental, physiological, and physical drivers is crucial for sustainable management of forested watersheds. This chapter presents the basic concepts of hydrology and watershed management. The fundamental properties and principles of water energy relationships on earth are presented which will serve as a basis for understanding the hydrological processes such as circulation, water form transformations, and flow processes that occur in watersheds. The subsequent sections deal with hydrological components, hydrographs, soil erosion, soil loss measurement, watershed delineation using geospatial technology, and watershed management.