Groundwater is a highly vulnerable and important resource to both humans and the environment, and therefore it is essential to understand the environmental implications of groundwater overexploitation. This presentation emphasizes the hydrologic fundamentals for such understanding that involve groundwater flow system concepts, the factors controlling aquifer responses to development, and surface water-groundwater interactions, and also highlights the environmental consequences of groundwater overexploitation throughout the world. Expanding irrigated agriculture and increasing world population are having a pronounced effect on global water resources and the environment. Groundwater overexploitation does not only result in aquifer depletion and water quality degradation but also impacts the ecological integrity of streams and wetlands, and results in significant losses of habitat and biodiversity. It is clear that intensive groundwater use and pollution in many regions of the world are threatening groundwater resources with serious consequences for human welfare and environmental degradation. Thus it is necessary for societies to recognize the finite limits of water availability and its vulnerability, and find ways to reconcile the demands of human development with the tolerance of nature.