Despite its recency as a research area, ecosystem service research has developed over the last decade into a significant area of science. In this paper we review recent advances and challenges in ecosystem service research. Our review finds that (i) Ecosystem services are ubiquitous in biosphere. But they are treated differently among scientific communities. In order for the concept of ecosystem services to make a large and meaningful contribution to conservation and human well-being, it needs to be clearly defined and put into a framework so that it is both fit for a given research purpose and operational for management decisions. In addition, there is not one classification scheme for all purposes. Ecosystem services should be classified based upon both the characteristics of ecosystem services of interest and a context for which the concept of ecosystem services is being mobilized. (ii) As sources of human well-being, ecosystem services have several key ecological and economic characteristics such as complexity, spatial scales, public-private goods aspect and benefit dependence. Understanding these characteristics is a prerequisite for measuring, modeling, valuing and managing ecosystem services. (iii) Human demands for ecosystem services and the supply and use of them are three necessary linkages between ecosystems and human well-being. They are of great importance to such vital issues as ecological conservation and social equity. In most cases, integrated studies involving multi-disciplines, multi-sectors and multi-districts on those three linkages should be carried out to support sound ecosystem service management decisions. And (iv) ecosystem services have multiple value attributes including utilitarian values and non-utilitarian values. In the processes of making decisions concerning the use of ecosystem services, all kinds of values are usually played out on a common and not always level playing field. They intersect and interact in various ways, and may complement or counter-balance each other in assisting decisions. A multi-criteria valuation system should be developed and used to estimate the value of ecosystem services.