Observational evidence for the existence of matter between the components of binary stars is summarized and discussed. Five kinds of evidence are considered: the presence of emission features in spectra; the distortion of velocity curves; spectrophotometry of variable absorption features in spectra; the distortion of light curves; changes of orbital period. The concept of a "characteristic volume" of a binary system is introduced and defined, and a model for the circumstellar matter is constructed with its help. Three major elements are recognized: cloud, disk, and streams. Estimates of the particle density are collected and presented. In streams the particle density appears to be about 1013/cm3; in the cloud about lO^/cm3. This latter value is near the maximum that can be permitted on dynamical grounds. Brief discussions are included of the relative importance of mass loss and mass transfer in the evolution of close binary systems, and of the applicability of particle-dynamics theories to the observations.