The Core Project Biospheric Aspects of the Hydrological Cycle (BAHC) of the International Geosphere Biosphere Programme (IGBP) addresses the biospheric aspects of the hydrological cycle through experiments and modelling of energy, water, carbon dioxide and sediment fluxes in the soil– vegetation–atmosphere system at a variety of spatial and temporal scales. Active regulation of water, energy and carbon dioxide fluxes by the vegetation make it an important factor in regulating the Earth’s hydrological cycle and in the formation of the climate. Consequently, human induced conversion of vegetation cover is an important driver for climate change. A number of recent studies, discussed in this paper, emphasise the importance of the terrestrial biosphere for the climate system. Initially, these studies demonstrate the influence of the land surface on tropical weather and climate, revealing the mechanisms, acting at various scales, that connect increasing temperatures and decreasing rainfall to large-scale deforestation and other forms of land degradation. More recently, the significance of the land surface processes for water cycle and for weather and climate in temperate and boreal zones was demonstrated. In addition the terrestrial biosphere plays a significant role in the carbon dioxide fluxes and in global carbon balance. Recent work suggests that many ecosystems both in the tropics and in temperate zones may act as a substantial sink for carbon dioxide, though the temporal variability of this sink strength is yet unclear. Further, carbon dioxide uptake and evaporation by vegetation are intrinsically coupled, leading to links and feedbacks between land surface and climate that are hardly explored yet. Earth’s vegetation cover and its changes owing to human impact have a profound influence on a lateral redistribution of water and transported constituents, such as nutrients and sediments, and acts therefore as an important moderator of Earth’s biogeochemical cycles. In the BAHC science programme, the importance of studying the influence of climate and human activities on mobilisation and river-borne transport of constituents is explicitly articulated. The terrestrial water and associated material cycles are studied as highly dynamic in space and time, and reflect a complex interplay among climatic forcing, topography, land cover and vegetation dynamics. Despite a large progress in our understanding of how the terrestrial biosphere interacts with Earth’s and climate system and with the terrestrial part of its hydrological cycle, a number of basic issues still remain unresolved. Limited to the scope of BAHC, the paper briefly assesses the present status and identifies the most important outstanding issues, which require further research. Two, arguably most important outstanding issues are identified: a limited understanding of natural variability, especially with respect to seasonal to inter-annual cycles, and of a complex ecosystem behaviour resulting from multiple feedbacks and multiple coupled biogeochemical cycles within the overall climate system. This leads to two major challenges for the future science agenda related to global change research. First, there is a need for a strong multidisciplinary integration of research efforts in both modelling and experiments, the latter extending to inter-annual timescales. Second, the ever increasing complexity in characterisation and modelling of the climate system, which is mainly owing to incorporation of the biosphere’s and human feedbacks, may call for a new approach in global change impact studies. Methodologies need to be developed to identify risks to, and vulnerability of environmental systems, taking into account all important interactions between atmospheric, ecological and hydrological processes at relevant scales. With respect to the influence of climate and human activities on mobilisation and river-borne transport of constituents, the main issues for the future are related to declining availability and quality of ground data for quantity and quality of water discharge. Such assessments as presented in this paper, in combination with community wide science evaluation, have lead to an update of the science agenda for BAHC, a summary of which is provided in the appendix.