This book provides a comprehensive exposition of M-ideal theory, a branch ofgeometric functional analysis which deals with certain subspaces of Banach spaces arising naturally in many contexts. Starting from the basic definitions the authors discuss a number of examples of M-ideals (e.g. the closed two-sided ideals of C*-algebras) and develop their general theory. Besides, applications to problems from a variety of areas including approximation theory, harmonic analysis, C*-algebra theory and Banach space geometry are presented. The book is mainly intended as a reference volume for researchers working in one of these fields, but it also addresses students at the graduate or postgraduate level. Each of its six chapters is accompanied by a Notes-and-Remarks section which explores further ramifications of the subject and gives detailed references to the literature. An extensive bibliography is included.