Our purpose in writing this book is to show how physics has been applied to developing our current understanding of the phase structure, physical condi tions, chemical makeup and, evolution of the (thermal) interstellar medium. We hope it provides an up-to-date overview which postgraduates, advanced undergraduates, and professionals in astrophysics can use as a "reference of first resort" before going on to read the more specialist monographs or research literature. We have covered the exciting observational results, but without consideration of the experimental techniques or instruments required. An elementary understanding of mathematical physics and of quantum me chanics has been assumed, and a knowledge of basic astrophysics would be helpful. Older textbooks on interstellar physics have tended to develop the subject matter in an order which reflects the historical development of the field. Here a more pedagological approach has been adopted, based on our lecture course experience. We cover successively more complex physical systems found in the diffuse universe. Detailed mathematical rigour is eschewed in favour of provid ing the reader with a basic physical insight into these systems. Astrophysical problems are treated as practical applications of the physics. In practice, the material is generally ranked in order of decreasing entropy, since the hottest and most diffuse phases tend to be physically less complex.