The exchange of heat, momentum, and mass in the atmosphere over mountainous terrain is controlled by synoptic-scale dynamics, thermally driven mesoscale circulations, and turbulence. This article reviews the key challenges relevant to the understanding of exchange processes in the mountain boundary layer and outlines possible research priorities for the future. The review describes the limitations of the experimental study of turbulent exchange over complex terrain, the impact of slope and valley breezes on the structure of the convective boundary layer, and the role of intermittent mixing and wave–turbulence interaction in the stable boundary layer. The interplay between exchange processes at different spatial scales is discussed in depth, emphasizing the role of elevated and ground-based stable layers in controlling multi-scale interactions in the atmosphere over and near mountains. Implications of the current understanding of exchange processes over mountains towards the improvement of numerical weather prediction and climate models are discussed, considering in particular the representation of surface boundary conditions, the parameterization of sub-grid-scale exchange, and the development of stochastic perturbation schemes.