Catastrophe bonds are one of the most important innovations in the risk transfer landscape of the last three decades. This chapter is a comprehensive discussion of catastrophe bonds. We contextualize catastrophe bonds within the broader context of alternative risk transfer and alternative capital, introduce the relevant terminology, explain the main structural and market characteristics, discuss the state of the art in catastrophe bond pricing, and provide an outlook for further developments in this area. Throughout the whole chapter, we highlight relevant academic research combined with current evidence from industry practice.