With the mechanosensory lateral line fish perceive water motions relative to their body surface and local pressure gradients. The lateral line plays an important role in many fish behaviors including the detection and localization of dipole sources and the tracking of prey fish. The sensory units of the lateral line are the neuromasts which are distributed across the surface of the animal. Water motions are received and transduced into neuronal signals by the neuromasts. These signals are conveyed by afferent nerve fibers to the fish brain and processed by lateral line neurons in parts of the brainstem, cerebellum, midbrain, and forebrain. In the cerebellum, midbrain, and forebrain, lateral line information is integrated with sensory information from other modalities. The present review introduces the peripheral morphology of the lateral line, and describes our understanding of lateral line physiology and behavior. It focuses on recent studies that have investigated: how fish behave in unsteady flow; what kind of sensory information is provided by flow; and how fish use and process this information. Finally, it reports new theoretical and biomimetic approaches to understand lateral line function.