Surface waves comprise an important aspect of the interaction between the atmosphere and the ocean, so a dynamically consistent framework for modelling atmosphere-ocean interaction must take account of surface waves, either implicitly or explicitly. In order to calculate the effect of wind forcing on waves and currents, and vice versa, it is necessary to employ a consistent formulation of the energy and momentum balance within the airflow, wave field, and water column. It is very advantageous to apply surface-following coordinate systems, whereby the steep gradients in mean flow properties near the air-water interface in the cross-interface direction may be resolved over distances which are much smaller than the height of the waves themselves. We may account for the waves explicitly by employing a numerical spectral wave model, and applying a suitable theory of wave-mean flow interaction. If the mean flow is small compared with the wave phase speed, perturbation expansions of the hydrodynamic equations in a Lagrangian or generalized Lagrangian mean framework are useful: for stronger flows, such as for wind blowing over waves, the presence of critical levels where the mean flow velocity is equal to the wave phase speed necessitates the application of more general types of surface-following coordinate system. The interaction of the flow of air and water and associated differences in temperature and the concentration of various substances (such as gas species) gives rise to a complex boundary-layer structure at a wide range of vertical scales, from the sub-millimetre scales of gaseous diffusion, to several tens of metres for the turbulent Ekman layer. The balance of momentum, heat, and mass is also affected significantly by breaking waves, which act to increase the effective area of the surface for mass transfer, and increase turbulent diffusive fluxes via the conversion of wave energy to turbulent kinetic energy.