Accurate representation of the physical layer is required for analysis and simulation of multi-hop networking in sensor, ad hoc, and mesh networks. This paper investigates, models, and analyzes the correlations that exist in shadow fading between links in multi-hop networks. Radio links that are geographically proximate often experience similar environmental shadowing effects and thus have correlated fading. We describe a measurement procedure and campaign to measure a large number of multi-hop networks in an ensemble of environments. The measurements show statistically significant correlations among shadowing experienced on different links in the network, with correlation coefficients up to 0.33. We propose a statistical model for the shadowing correlation between link pairs which shows strong agreement with the measurements, and we compare the new model with an existing shadowing correlation model of Gudmundson (1991). Finally, we analyze multi-hop paths in three and four node networks using both correlated and independent shadowing models and show that independent shadowing models can underestimate the probability of route failure by a factor of two or greater.