The process of Fischer–Tropsch synthesis is commonly described as a series of reactions in which CO and H2 are dissociated and adsorbed on the metals and then rearranged to produce hydrocarbons and H2O. However, CO dissociation adsorption is regarded as the initial stage of Fischer–Tropsch synthesis and an essential factor in the control of catalytic activity. Several pathways have been proposed to activate CO, namely direct CO dissociation, activation hydrogenation, and activation by insertion into growing chains. In addition, H2O is considered an important by-product of Fischer–Tropsch synthesis reactions and has been shown to play a key role in regulating the distribution of Fischer–Tropsch synthesis products. The presence of H2O may influence the reaction rate, the product distribution, and the deactivation rate. Focus on H2O molecules and H2O-derivatives (H*, OH* and O*) can assist CO activation hydrogenation on Fe- and Co-based catalysts. In this work, the intermediates (C*, O*, HCO*, COH*, COH*, CH*, etc.) and reaction pathways were analyzed, and the H2O and H2O derivatives (H*, OH* and O*) on Fe- and Co-based catalysts and their role in the Fischer–Tropsch synthesis reaction process were reviewed.