Climate warming has accelerated permafrost degradation, leading to significant challenges in water circulation and transformation. Since the early 21st century, especially during the last ten years, permafrost hydrology has garnered substantial attention, yielding a wealth of research outcomes. However, a comprehensive and systematic understanding of the permafrost hydrology remains limited. This study synthesised the current knowledge through an extensive literature review and systematic analysis, establishing a foundational framework for permafrost hydrology. The framework integrated three critical dimensions: surface hydrological processes, hydrological functions of the active layer, and the hydrological effects of permafrost changes. Subsequently, the current state, trends, and challenges in permafrost hydrology research were summarised, and a holistic overview was provided. Regarding surface hydrological processes in permafrost regions, this study examined the impacts of freeze-thaw cycles on surface runoff from multiple perspectives, including the influence of active layer thawing, slope hydrological processes, river channel dynamics, large-scale permafrost hydrology, and the hydrological consequences of thermokarst formation. For hydrological processes within the active layer, the study identified the hydrological role of the active layer, key factors influencing its hydrological behaviour, and the interactions between suprapermafrost water and soil water. Concerning the hydrological impacts of permafrost thaw, this study investigated the transformation dynamics between surface and groundwater in permafrost regions by analysing the effects of climate change through increased baseflow, groundwater recharge, and subsurface runoff. Finally, this study outlined future research directions, emphasising three key areas: the application of novel observational methods, integrated surface-subsurface investigations, and the ecological and environmental impacts of permafrost hydrological changes.