The presence of water on the Moon has been indicated by various remote-sensing observations and analyses of returned samples. Several missions are planned to conduct new in situ research on the lunar surface to directly observe and characterize lunar water. A comprehensive characterization of the present forms of water, their abundance, spatial distribution, temporal variation, and possible origin is required to understand the lunar water cycle and the relevance of individual source and sink mechanisms and transformations between the involved volatile species. These processes extend over vastly different scales, and the governing parameters are often insufficiently constrained by experimental and observational data. Here, I present a brief overview of the current state of knowledge on the lunar water cycle, its relevance for lunar science and exploration, and some of the main challenges of modeling and future in situ analyses aiming to substantially advance the understanding of lunar water occurrences.