The particular European perspective on current forest and water issues is outlined in three focal areas: water supply, water quality, and water-related hazards. Much of the synopsis relies on contributions brought together within the European COST consortium ‘Forest management and the water cycle’, which is operating from 2007 to 2011. Under the currently projected climate change (CC) scenarios for Europe, the humidity gradient across the sub-continent from moist Northwest to dry Southeast will probably intensify, bringing about potentially more flooding problems at the ‘wet end’, and more drought and related problems (wildfires, salination) at the ‘dry end’. Careful planning of management is essential wherever tradeoff situations between forest growth and water yield emerge. The water quality issue in Europe is not as pressing as it was a few decades ago. Much has been achieved on account of successful water- and air-pollution control. Particularly, the acidification pressure on forest soils and their water-related systems was much relieved, due to strongly declining acidic deposition over the past 30 years. Forests and their appropriate management for optimizing water retention can support flood control, but with clear limitations under very strong and catastrophic events. The contribution to flood control is more important under ‘normal’ conditions than under extremes. Important controls are infiltration capacity and the status of water saturation prior to the rain event, i.e. the still available storage capacity. The safeguarding of water quality is seen as the most important single aspect among forest-water relations. Copyright © 2011 John Wiley & Sons, Ltd.