The use of signal models is one of the key factors enabling us to establish high quality signal transformation algorithms with intuitive high level control parameters. In the present article we will discuss signal models, and the signal transformation algorithms that are based on these models, in relation to the physical properties of the sound source and the properties of human sound perception. We will argue that the implementation of perceptually intuitive high quality signal transformation algorithms requires strong links between the signal models and the perceptually relevant physical properties of the sound source. We will present an overview over the history of 2 sound models that are used for sound transformation and will show how the past and future evolution of sound transformation algorithms is driven by our understanding of the physical world.