The European Hydrological System (or Système Hydrologique Europeén, SHE) was initiated as a collaborative venture in 1976 between the Danish Hydraulic Institute (Denmark), Institute of Hydrology (UK) and SOGREAH (France). The present paper reviews the development history of the SHE and discusses the practical and scientific difficulties encountered during the different stages of the development. Comparison is made with eight other well-known model codes with respect to development stage and code dissemination among researchers and practitioners. Finally, the scientific developments and disputes on physically-based distributed modelling are discussed and the future perspectives outlined. The SHE venture has resulted in significant contributions to hydrological science, both in terms of model codes and new scientific insight. The fundamental scientific problems related to the inability to incorporate local scale spatial heterogeneity, scaling and uncertainty that were formulated are fundamentally still unresolved. Thus, in spite of the original visions, the hydrological community has not yet witnessed a model that in a universal sense (i.e. at all scales and for all internal variables) simulates accurate results for the right reasons. Instead, much of the scientific progress achieved during the recent years has dealt with how to live with these recognized problems.