Forests are widely recognised as recommended land cover for protection of water resources. It is commonly understood that forests control erosion, improve water quality and regulate water flows in catchments to some extent. Less-well understood are aspects of the so-called green water flow: biomass production in forests has a price locally in terms of evaporative water losses though it can provide rainfall elsewhere. In this chapter, we discuss the complex and sometimes contra-intuitive issues that emerge when trying to optimise forest management for water-related ecosystem services. We analyse three cases in very different geographical and socio-economic settings where the water-related ecosystem services of the forest have been a driver for forest man-agement transition. In the first example from Ethiopia, forests are restored for soil and water conservation purposes related to green water, while in the second case in South Africa, plantation forests are removed with the intention of ecological restoration and increase in blue water availability. In the last case from Italy, we discover that schemes for payment for ecosystem services (PES) make a change with respect to water-related ecosystem services. The case studies show that such transitions can follow very different pathways, determined by the biophysical, socio-economic, and institutional contexts. But despite these differences, the case studies show patterns in common. The success or failure of management policies is highly scale-dependent (extension and intensity of the intervention). Changes aimed at improving an ecosystem service always show trade-offs with other ecosystem services. Often, measures in catchments are based on a correct interpretation of hydrological knowledge but fail to optimise for the range of upstream and downstream ecosystem services at stake. The main challenge for the future is to further foster the ongoing paradigm shift in the way water-related forest ecosystems services are considered, with a change from supply-side policies to demand-side policies and supply-demand linkages and from purely technical solutions to green infrastructure solutions. PART II 27.1 Introduction to water-related ecosystem services F resh water is becoming a scarce global resource of strategic importance (Duda and El-Ashry 2000). In this context, the regulating role of forests has been recognised (de Groot et al. 2010), although the sponge model – the general belief that forests store water in the rainy season to slowly release it in the dry season (e.g. Hamilton 1985) – is not much supported by available data. Forests may increase low flows but in most cases they decrease them (Jackson et al. 2005, Birot et al. 2011). For a better understanding of the hydrological cycle, distinguish-ing between blue and green water (Falkenmark and Rockstrøm 2005, Birot et al. 2011) is very useful. Blue water resources are formed by the rainfall frac-tion that reaches rivers and lakes after percolation into the aquifers or directly as surface run-off. Hu-mans strongly value the quantity and quality of blue water, as it forms the main source for drinking water,