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Vertical seismic profiling is a powerful and widely implemented method of seismic exploration. It suggests a lot of opportunities for detailed reservoir study including velocities and anisotropy estimation, direct impulse shape registration, time-depth correlation, multi-wave analysis and imaging. These advantages of the VSP method are well known but often they become severely spoiled as a result of inappropriate processing techniques. In this paper we establish a number of general principles of VSP data processing and particulary for accurate wave field decomposition that ensures the high quality and reliability of acquired results of processing and interpretation. Examples of real VSP data processing are also presented to illustrate the application of the proposed techniques.