The concept of ecosystem services has shifted our paradigm of how nature matters to human societies. Instead of viewing the preservation of nature as something for which we have to sacrifice our well-being, we now perceive the environment as natural capital, one of society's important assets. But ecosystem services are becoming increasingly scarce. In order to stop this trend, the challenge is to provoke society to acknowledge the value of natural capital. Ecosystem services valuation (ESV) is the method to tackle such a challenge. ESV is the process of assessing the contributions of ecosystem services to sustainable scale, fair distribution, and efficient allocation. It is a tool that (1) provides for comparisons of natural capital to physical and human capital in regard to their contributions to human welfare; (2) monitors the quantity and quality of natural capital over time with respect to its contribution to human welfare; and (3) provides for evaluation of projects that will affect natural capital stocks. This review covers: (1) what has been done in ESV research in the last 50 years; (2) how it has been used in ecosystem management; and (3) prospects for the future. Our survey of the literature has shown that over time, there has been movement toward a more transdisciplinary approach to ESV research which is more consistent with the nature of the problems being addressed. On the other hand, the contribution of ESV to ecosystem management has not been as significant as hoped nor as clearly defined. Conclusions drawn from the review are as follows: first, ESV researchers will have to transcend disciplinary boundaries and synthesize tools, skills, and methodologies from various disciplines; second, ESV research has to become more problem-driven rather than tool-driven because ultimately the success of ESV will be judged on how well it facilitates real-world decision making and the conservation of natural capital.