The advent of XML as a universal exchange format and of Web services as a basis for distributed computing, has fostered the emergence of a new class of documents that we call
Active XML documents
(AXML in short). These are XML documents where some of the data is given explicitly while other parts are given only intentionally by means of embedded calls to web services, that can be called to generate the required information. We argue that AXML provides powerful means for the modeling and integration of distributed dynamic Web data. AXML can capture various integration scenarios including peer-to-peer data mediation and warehousing, while providing support for new features of Web services such as subscription, service directories, and controlling data changes. Moreover, by allowing service call parameters and responses to contain calls to other services, AXML enables distributed computation over the web. We overview here the AXML project, considering the new possibilities that Active XML brings to Web data management and the fundamental challenges it raises.