During the last two decades or so, studies on the applications of the concepts of nonlinear dynamics and chaos to hydrologic systems and processes have been on the rise. Earlier studies on this topic focused mainly on the investigation and prediction of chaos in rainfall and river flow, and further advances were made during the subsequent years through applications of the concepts to other problems (e.g. data disaggregation, missing data estimation, and reconstruction of system equations) and other processes (e.g. rainfall-runoff and sediment transport). The outcomes of these studies are certainly encouraging, especially considering the exploratory stage of the concepts in hydrologic sciences. This paper discusses some of the latest developments on the applications of these concepts to hydrologic systems and the challenges that lie ahead on the way to further progress. As for their applications, studies in the important areas of scaling, groundwater contamination, parameter estimation and optimization, and catchment classification are reviewed and the inroads made thus far are reported. In regards to the challenges that lie ahead, particular focus is given to improving our understanding of these largely less-understood concepts and also finding ways to integrate these concepts with the others. With the recognition that none of the existing one-sided 'extremeview' modeling approaches is capable of solving the hydrologic problems that we are faced with, the need for finding a balanced 'middle-ground' approach that can integrate different methods is stressed. To this end, the viability of bringing together the stochastic concepts and the deterministic concepts as a starting point is also highlighted.