The complex and dynamic nature of environmental problems requires flexible and transparent decision-making that embraces a diversity of knowledges and values. For this reason, stakeholder participation in environmental decision-making has been increasingly sought and embedded into national and international policy. Although many benefits have been claimed for participation, disillusionment has grown amongst practitioners and stakeholders who have felt let down when these claims are not realised. This review first traces the development of participatory approaches in different disciplinary and geographical contexts, and reviews typologies that can be used to categorise and select participatory methods. It then reviews evidence for normative and pragmatic benefits of participation, and evaluates limitations and drawbacks. Although few of the claims that are made have been tested, there is evidence that stakeholder participation can enhance the quality of environmental decisions by considering more comprehensive information inputs. However, the quality of decisions made through stakeholder participation is strongly dependant on the nature of the process leading to them. Eight features of best practice participation are then identified from a Grounded Theory Analysis of the literature. These features emphasise the need to replace a "tool-kit" approach, which emphasises selecting the relevant tools for the job, with an approach that emphasises participation as a process. It is argued that stakeholder participation needs to be underpinned by a philosophy that emphasises empowerment, equity, trust and learning. Where relevant, participation should be considered as early as possible and throughout the process, representing relevant stakeholders systematically. The process needs to have clear objectives from the outset, and should not overlook the need for highly skilled facilitation. Local and scientific knowledges can be integrated to provide a more comprehensive understanding of complex and dynamic socio-ecological systems and processes. Such knowledge can also be used to evaluate the appropriateness of potential technical and local solutions to environmental problems. Finally, it is argued that to overcome many of its limitations, stakeholder participation must be institutionalised, creating organisational cultures that can facilitate processes where goals are negotiated and outcomes are necessarily uncertain. In this light, participatory processes may seem very risky, but there is growing evidence that if well designed, these perceived risks may be well worth taking. The review concludes by identifying future research needs.