We review the timing and spectral evolution of black hole X-ray binary systems, with emphasis on the current accretion-ejection paradigm. When in outburst, stellar mass black hole binaries may become the brightest X-ray sources in the sky. Analysis of high signal to noise data has resulted in a general framework of correlated X-ray spectral and fast timing behavior during an outburst. We utilize recent data from small but powerful observatories launched in the last decade supported by multi-wavelength ground-based observations. Coordinated observations showed that outflows (in the form of jets and winds) are an integral part of this evolution, providing a coherent phenomenological picture that we discuss in terms of the hardness-intensity diagram and spectral states. We pay particular attention to the evolution of broad and narrow emission and absorption lines and hard tails in the energy spectrum, quasi-periodic oscillations, lags and reverberation from fast timing studies, making the connections with multi-wavelength observations when relevant. We use the bright outburst of MAXI J1820+070 as a recent test case to discuss different aspects of spectral and timing evolution, but the data and results are not limited to this source. In the second part of the review, we discuss competing theoretical models that can explain different aspects of the rich phenomenology. Data from future missions and simulation results will have the power to resolve discrepancies in these models and black hole binary research will continue to be an exciting field that allows for tests of fundamental physics and studies of the properties of matter in strong gravitational fields.