The performance and stability of organic–inorganic hybrid perovskite solar cells (PSCs) is sensitive to water and moisture in an ambient environment. Understanding how H₂O influences the perovskite material is also important for developing appropriate control strategies to mitigate the problem. Here we provide a comprehensive review on the effect of water on the state-of-the-art lead-based perovskite solar cells in terms of perovskite material design, perovskite film preparation, device fabrication, and photovoltaic application. It is found that a moderate amount of water can facilitate nucleation and crystallization of the perovskite material, resulting in better perovskite film quality and enhanced PSC performance. The perovskite materials are irreversibly destroyed by H₂O after a certain level of water, but they exihibit better tolerance than initially expected. Humidity resistant fabrication of high-performance PSC devices and modules should therefore be favoured. Generally, water shows a negative effect on the long-term stability and lifetime of PSCs. To reduce the effects from water during outdoor operation, attention should be paid to different protection methods such as varying the perovskite composition, optimizing the electron/hole transport layer and encapsulation of the device.