A rich set of new measurements has greatly expanded our understanding of the Moon–plasma interaction over the last sixteen years, and helped demonstrate the fundamentally kinetic nature of many aspects thereof. Photon and charged particle impacts act to charge the lunar surface, forming thin Debye-scale plasma sheaths above both sunlit and shadowed hemispheres. These impacts also produce photoelectrons and secondary electrons from the surface, as well as ions from the surface and exosphere, all of which in turn feed back into the plasma environment. The solar wind interacts with sub-ion-inertial-scale crustal magnetic fields to form what may be the smallest magnetospheres in the solar system. Proton gyro-motion, solar wind pickup of protons scattered from the dayside surface, and plasma expansion into vacuum each affect the dynamics and structure of different portions of the lunar plasma wake. The Moon provides us with a basic plasma physics laboratory for the study of fundamental processes, some of which we cannot easily observe elsewhere. At the same time, the Moon provides us with a test bed for the study of processes that also operate at many other solar system bodies. We have learned much about the Moon–plasma interaction, with implications for other space and planetary environments. However, many fundamental problems remain unsolved, including the details of the coupling between various parts of the plasma environment, as well as between plasma and the surface, neutral exosphere, and dust. In this paper, we describe our current understanding of the lunar plasma environment, including illustrative new results from Lunar Prospector and Kaguya, and outstanding unsolved problems.