The purposes of this paper are primarily to research on behavior of groundwater flow in saturated and unsaturated zone, and to present the fundamentals of the theory of groundwater flow. This paper discusses the physics of the saturated-unsaturated groundwater motion. Evaluations confirm the early belief that Darcy's law is of the nature of statistical result giving the empirical equivalent of Navier-Stokes equations. The governing equation of saturated-unsaturated flow in porous media is derived from the law of mass conservation and from the Darcy's law and Richard's equation of motion and is compared with the Klute's diffusion equation which has been widely used in the analysis of unsaturated flow. As a result; it is concluded that the governing equation has the advantage that can be applied for the whole flow region. Typical boundary conditions are enumerated.