This second edition contains three new appendices dealing with a new characterization of free profinite groups, presentations of pro-p groups and a new conceptually simpler approach to the proof of some classical subgroup theorems. Throughout the text there are additions in the form of new results, improved proofs,typographical corrections, and an enlarged bibliography. The list of open questions has been updated; comments and references have been added about those previously open problems that have been solved after the first edition appeared.