Groundwater models serve as support tools to among others: assess water resources, evaluate management strategies, design remediation systems and optimize monitoring networks. Thus, the assimilation of information from observations into models is crucial to improve forecasts and reduce uncertainty of their results. As more information is collected routinely due to the use of automatic sensors, data loggers and real time transmission systems; groundwater modelers are becoming increasingly aware of the importance of using sophisticated tools to perform model calibration in combination with sensitivity and uncertainty analysis. Despite their usefulness, available approaches to perform this kind of analyses still present some challenges such as non-unique solution for the parameter estimation problem, high computational burden and a need of a deep understanding of the theoretical basis for the correct interpretation and use of their results, in particular the ones related to uncertainty analysis. We present a brief derivation of the main equations that serve as basis for this kind of analysis. We demonstrate how to use them to estimate parameters, assess the sensitivity and quantify the uncertainty of the model results using an example inspired by a real world setting. We analyze some of the main pitfalls that can occur when performing such kind of analyses and comment on practical approaches to overcome them. We also demonstrate that including groundwater flow estimations, although helpful in constraining the solution of the inverse problem as shown previously, may be difficult to apply in practice and, in some cases, may not provide enough information to significantly constrain the set of potential solutions.