ABSTRACTPayment for environmental services (PES) is an economic instrument designed to promote the conservation of ecosystems and the provision of their services. For almost two decades, the concept, design, and implementation of this tool haveevolved and provided lessons on aspects that should be considered for its successful performance. This document reviews the evolution of the concept of environmental servicesand the payment for environmental services instrument, along with the features, preconditions, and conditions necessary for its correct implementation. We also review the theoretical bases that support its application and how these bases define fundamentalconditions for the decision on whether PES is the most suitable tool in a given scenario. An extensive review of studies reveals the ways in which participants’ preferences define contract specifications and the importance of considering these preferences in contract design. The main lessons learned from this review are as follows: (i) PES is the most direct economic instrument to reach conservation;(ii) however, it is notthe only available tool and its design does not allow to solve all of the environmental problems;(iii) the successful implementation of a PES scheme depends on whether or not the specific and contextual conditions surrounding each situation, as well as the preferences and constraints of potential participants are accounted for.