Water molecules are often found at the binding interface of biomolecular complexes mediating the interaction between polar groups viahydrogen bonds, or simply filling space providing van der Waals interactions. Recent studies have demonstrated the importance of taking such water molecules into account in docking and binding affinity prediction. Here, we review the recent experimental and theoretical work aimed at quantifying the influence of interfacial water on the thermodynamic properties of binding. We highlight especially our recent results obtained by inhomogeneous fluid solvation theory in several systems and the prediction of the thermodynamic consequences of displacement of the bound water molecule by ligand modification. Finally, we discuss possible directions for further progress in this field.