At the watershed scale, soil moisture is the major control for rainfall–runoff response, especially where saturation excess runoff processes dominate. From the ecological point of view, the pools of soil moisture are fundamental ecosystem resources providing the transpirable water for plants. In drylands particularly, soil moisture is one of the major controls on the structure, function, and diversity in ecosystems. In terms of the global hydrological cycle, the overall quantity of soil moisture is small, ∼0.05%; however, its importance to the global energy balance and the distribution of precipitation far outweighs its physical amount. In soils it governs microbial activity that affects important biogeochemical processes such as nitrification and CO2 production via respiration. During the past 20 years, technology has advanced considerably, with the development of different electrical sensors for determining soil moisture at a point. However, modeling of watersheds requires areal averages. As a result, point measurements and modeling grid cell data requirements are generally incommensurate. We review advances in sensor technology, particularly emerging geophysical methods and distributed sensors, aimed at bridging this gap. We consider some of the data analysis methods for upscaling from a point to give an areal average. Finally, we conclude by offering a vision for future research, listing many of the current scientific and technical challenges.