Adaptive networks consist of a collection of nodes with adaptation and learning abilities. The nodes interact with each other on a local level and diffuse information across the network to solve estimation and inference tasks in real-time. In this dissertation, we first examine and compare the mean-square performance of two main strategies for distributed estimation over networks: consensus strategies and diffusion strategies. The analysis confirms that diffusion networks converge faster and reach lower mean-square deviation than consensus networks, and that their mean-square stability is insensitive to the choice of the combination weights. In contrast, and surprisingly, it is shown that consensus networks can become unstable even if all i...