We consider the role of nonlinear interactions and especially of the modulational instability on the formation of extreme waves. Most of material described herein is based on 10 years of research conducted at the University of Torino, Italy. The starting point for understanding the link between nonlinearity and extreme waves are the envelope equations. In particular attention is here given to the celebrated Nonlinear Schroedinger equation that has played a key role in the comprehension of the problem. We will also include detailed information on experimental work which we have successfully carried on during the last years.