The redshift 2 universe is one of the most interesting epochs of galaxy evolution. It is the era with the peak of the cosmic star formation rate. Between redshift 3 and 1 the total stellar mass density in galaxies increased fromm15% to 70%. It is also the time of rapid galaxy assembly and the epoch where galaxy morphology was determined. Observations of z=2 star-forming galaxies reveal physical properties that are unparalleled in the z=0 Universe. Gas-rich, extended, fast rotating and highly turbulent disks have been found with star formation rates that are a factor of 10 to 100 larger than in present-day Milky-Way type galaxies. Kpc-sized, massive gas clumps dominate the appearance of these galaxies. Even more interesting are recent observations of declining rotation curves in the outer parts of these disks and dynamical masses, inferred from their rotation velocities that are equal to the observed baryonic mass leaving no room for dark matter. I will summarize the newest observations and the puzzles and challenges that they generate for our theoretical understanding of cosmic galaxy formation and galactic dynamics.