The ability to cope with multiple competing stakeholders, fluid requirements, emergent behavior, and susceptibility to external pressures that can cause changes across an entire organization, coupled with the ability to support service diversification, is a key to an enterprise’s competitiveness. Web services equip enterprises with the potential to react to change by addressing two interrelated sets of requirements: the ability to accommodate service changes that demand rapid response and to support service variation according to customers’ needs and requirements. In this paper we introduce the concept of service evolution management, which provides an understanding of change impact, service changes control, tracking and auditing of service versions, and status accounting. To achieve this, we develop a formal model and theory for service evolution that allows multiple active service versions to be created consistently and co-exist, while executing schema changes effectively.