We seek to create tools for a model-theoretic analysis of types in
algebraically closed valued fields (ACVF). We give evidence to show that a
notion of 'domination by stable part' plays a key role. In Part A, we develop a
general theory of stably dominated types, showing they enjoy an excellent
independence theory, as well as a theory of definable types and germs of
definable functions. In Part B, we show that the general theory applies to
ACVF. Over a sufficiently rich base, we show that every type is stably
dominated over its image in the value group. For invariant types over any base,
stable domination coincides with a natural notion of `orthogonality to the
value group'. We also investigate other notions of independence, and show that
they all agree, and are well-behaved, for stably dominated types. One of these
is used to show that every type extends to an invariant type; definable types
are dense. Much of this work requires the use of imaginary elements. We also
show existence of prime models over reasonable bases, possibly including
imaginaries
