In section 1 the notion of state and state equations for water resource systems are discussed both for continuous and discrete dynamics. Section 2 presents the solution of state equation for linear systems including the derivation of state transition and impulse response matrices. In section 3 the structural properties such as observability, controllability, indentifiability and minimal realizations are discussed. Finally, in section 4 the state concept for stochastic systems is reexamined. The state and measurement disturbances are considered as being white Gaussian noise processes and it is showed how the case of sequentially correlated uncertainties can be reduced to an augmented system model having white Gaussian state disturbance only. The paper concludes with the generalization of structural properties for stochastic systems. To illustrate the underlying concepts examples taken from a broad range of water resources problems, such as rainfall analysis, rainfall/runoff relation, reservoir and lake/aquifer problems, water quality control etc., are presented.