Observation of surface water is a functional requirement for studying ecological and hydrological processes. Recent advances in satellite-based optical remote sensors have promoted the field of sensing surface water to a new era. This paper reviews the current status of detecting, extracting, and monitoring surface water using optical remote sensing, especially progress in the last decade. It also discusses the current status and challenges in this field, including spatio-temporal scale issues, integration with in situ hydrological data and elevation data, obscuration caused by clouds and vegetation, and the growing need to map surface water at a global scale. Historically, sensors have exhibited a contradiction in resolutions. Techniques including pixel unmixing and reconstruction, and spatio-temporal fusion have been developed to alleviate this contradiction. Spatio-temporal dynamics of surface water have been modeled by combining remote sensing data with in situ river flow. Recent studies have also demonstrated that the river discharge can be estimated using only optical remote sensing imagery, providing valuable information for hydrological studies in ungauged areas. Another historical issue for optical sensors has been obscuration by clouds and vegetation. An effective approach of reducing this limitation is to combine with synthetic aperture radar data. Digital elevation model data have also been employed to eliminate cloud/terrain shadows. The development of big data and cloud computation techniques makes the increasing demand of monitoring global water dynamics at high resolutions easier to achieve. An integrated use of multisource data is the future direction for improved global and regional water monitoring.Plain Language Summary Observing surface water is essential for ecological and hydrological studies. This paper reviews the current status of detecting, extracting, and monitoring surface water using optical remote sensing, especially progress in the last decade. It also discusses the current status and challenges in this field. For example, it was found that pixel unmixing and reconstruction, and spatio-temporal fusion are two common and low-cost approaches to enhance surface water monitoring. Remote sensing data have been integrated with in situ river flow to model spatio-temporal dynamics of surface water. Recent studies have also proved that the river discharge can be estimated using only optical remote sensing imagery. This will be a breakthrough for hydrological studies in ungauged areas. Optical sensors are also easily obscured by clouds and vegetation. This limitation can be reduced by integrating optical data with synthetic aperture radar data and digital elevation model data. There is increasing demand of monitoring global water dynamics at high resolutions. It is now easy to achieve with the development of big data and cloud computation techniques. Enhanced global or regional water monitoring in the future requires integrated use of multiple sources of remote sensing data.