This review covers, in a comprehensive manner, the approaches available in the literature to upscale soil water processes and hydraulic parameters in the vadose zone. We distinguish two categories of upscaling methods: forward approaches requiring information about the spatial distribution of hydraulic parameters at a small scale, and inverse modeling approaches requiring information about the spatial and temporal variation of state variables at various scales, including so-called “soft data”. Geostatistical and scaling approaches are crucial to upscale soil water processes and to derive large-scale effective fluxes and parameters from small-scale information. Upscaling approaches include stochastic perturbation methods, the scaleway approach, the stream-tube approach, the aggregation concept, inverse modeling approaches, and data fusion. With all upscaling methods, the estimated effective parameters depend not only on the properties of the heterogeneous flow field but also on boundary conditions. The use of the Richards equation at the field and watershed scale is based more on pragmatism than on a sound physical basis. There are practically no data sets presently available that provide sufficient information to extensively validate existing upscaling approaches. Use of numerical case studies has therefore been most common. More recently and still under development, hydrogeophysical methods combined with ground-based remote sensing techniques promise significant contributions toward providing high-quality data sets. Finally, most of the upscaling literature in vadose zone research has dealt with bare soils or deep vadose zones. There is a need to develop upscaling methods for real world soils, considering root water uptake mechanisms and other soil–plant–atmosphere interactions.