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Understanding of hydrological processes, including consideration of interactions between vegetation growth and water transfer in the root zone, underpins efficient use of water resources in arid-zone agriculture. Water transfers take place in the soil-plant-atmosphere continuum, and include groundwater dynamics, unsaturated zone flow, evaporation/transpiration from vegetated/bare soil and surface water, agricultural canal/surface water flow and seepage, and well pumping. Models can be categorized into three classes: (1) regional distributed hydrological models with various land uses, (2) groundwater-soil-plant-atmosphere continuum models that neglect lateral water fluxes, and (3) coupled models with groundwater flow and unsaturated zone water dynamics. This review highlights, in addition, future research challenges in modeling arid-zone agricultural systems, e.g., to effectively assimilate data from remote sensing, and to fully reflect climate change effects at various model scales.