Progress, since the ITER Physics Basis publication (ITER Physics Basis Editors et al 1999 Nucl. Fusion 39 2137-2664), in understanding the processes that will determine the properties of the plasma edge and its interaction with material elements in ITER is described. Experimental areas where significant progress has taken place are energy transport in the scrape-off layer (SOL) in particular of the anomalous transport scaling, particle transport in the SOL that plays a major role in the interaction of diverted plasmas with the main-chamber material elements, edge localized mode (ELM) energy deposition on material elements and the transport mechanism for the ELM energy from the main plasma to the plasma facing components, the physics of plasma detachment and neutral dynamics including the edge density profile structure and the control of plasma particle content and He removal, the erosion of low- and high-Z materials in fusion devices, their transport to the core plasma and their migration at the plasma edge including the formation of mixed materials, the processes determining the size and location of the retention of tritium in fusion devices and methods to remove it and the processes determining the efficiency of the various fuelling methods as well as their development towards the ITER requirements. This experimental progress has been accompanied by the development of modelling tools for the physical processes at the edge plasma and plasma-materials interaction and the further validation of these models by comparing their predictions with the new experimental results. Progress in the modelling development and validation has been mostly concentrated in the following areas: refinement in the predictions for ITER with plasma edge modelling codes by inclusion of detailed geometrical features of the divertor and the introduction of physical effects, which can play a major role in determining the divertor parameters at the divertor for ITER conditions such as hydrogen radiation transport and neutral-neutral collisions, modelling of the ion orbits at the plasma edge, which can play a role in determining power deposition at the divertor target, models for plasma-materials and plasma dynamics interaction during ELMs and disruptions, models for the transport of impurities at the plasma edge to describe the core contamination by impurities and the migration of eroded materials at the edge plasma and its associated tritium retention and models for the turbulent processes that determine the anomalous transport of energy and particles across the SOL. The implications for the expected performance of the reference regimes in ITER, the operation of the ITER device and the lifetime of the plasma facing materials are discussed.