In the first part, the book gives an up-to-date summary of the observational data. In the second part, it deals with the kinetic description of cosmic ray plasma. The underlying diffusion-convection transport equation, which governs the coupling between cosmic rays and the background plasma, is derived and analyzed in detail. In the third part, several applications of the solutions of the transport equation are presented and how key observations in cosmic ray physics can be accounted for is demonstrated.