With increasing threats and pressure exerted on Earth’s forest resources, there are greater demands for more quantitative, timely, and accurate information on their state, functioning, and sustainability. Satellite remote sensing offers an effective way of measuring and monitoring vast forest areas in a consistent and robust manner. This complements ground forest surveys and overcomes the spatial limitations of in situ sampling of forest biophysical properties. Among the various remote sensing tools used in characterizing forests, spectral vegetation indices (VIs) are widely adopted for monitoring forest states and canopy processes. In this article I provide a brief overview on VI applications and advances made in the assessment and monitoring of forest biophysical states, functioning, phenology, and disturbance. I also address current and future challenges, demands, and limitations of VIs for long term forest monitoring and applications in climate science, hydrology, and biogeochemistry.