Forests play a crucial role in the hydrological cycle. Forests influence the amount of water available and regulate surface and groundwater flows while maintaining high water quality. Forests and trees contribute to the reduction of water-related risks such as landslides, local floods and droughts and help prevent desertification and salinisation. Forested watersheds supply a high proportion of the world's accessible fresh water for domestic, agricultural, industrial and ecological needs in both upstream and downstream areas. A key challenge faced by land, forest and water managers is to maximise the wide range of forest benefits without detriment to water resources and ecosystem function. This is particularly relevant in the context of adaptation to climate change, which increasingly reinforces the importance of sustainable forest management. Between 2008 and 2011, FAO and other institutions organised many events on forests and water as part of the follow-up to the Shiga Declaration and the second Warsaw Resolution. Presenting experiences ranging from research to project implementation worldwide, these events provided new, up-to-date insights into the topic, as well as important recommendations for the way forward. This publication synthesises the main outcomes and recommendations resulting from this process and presents a comprehensive and practical international forests and water agenda to address future courses of action.