Crop coefficients were developed to determine crop water needs based on the evapotranspiration (ET) of a reference crop under a given set of meteorological conditions. Starting in the 1980s, crop coefficients developed through lysimeter studies or set by expert opinion began to be supplemented by remotely sensed vegetation indices (VI) that measured the actual status of the crop on a field-by-field basis. VIs measure the density of green foliage based on the reflectance of visible and near infrared (NIR) light from the canopy, and are highly correlated with plant physiological processes that depend on light absorption by a canopy such as ET and photosynthesis. Reflectance-based crop coefficients have now been developed for numerous individual crops, including corn, wheat, alfalfa, cotton, potato, sugar beet, vegetables, grapes and orchard crops. Other research has shown that VIs can be used to predict ET over fields of mixed crops, allowing them to be used to monitor ET over entire irrigation districts. VI-based crop coefficients can help reduce agricultural water use by matching irrigation rates to the actual water needs of a crop as it grows instead of to a modeled crop growing under optimal conditions. Recently, the concept has been applied to natural ecosystems at the local, regional and continental scales of measurement, using time-series satellite data from the MODIS sensors on the Terra satellite. VIs or other visible-NIR band algorithms are combined with meteorological data to predict ET in numerous biome types, from deserts, to arctic tundra, to tropical rainforests. These methods often closely match ET measured on the ground at the global FluxNet array of eddy covariance moisture and carbon flux towers. The primary advantage of VI methods for estimating ET is that transpiration is closely related to radiation absorbed by the plant canopy, which is closely related to VIs. The primary disadvantage is that they cannot capture stress effects or soil evaporation. Copyright ?? 2011 John Wiley & Sons, Ltd.