Water constitutes roughly a quarter of the cortical bone by volume yet can greatly influence mechanical properties and tissue quality. There is a growing appreciation for how water can dynamically change due to age, disease, and treatment. A key emerging area related to bone mechanical and tissue properties lies in differentiating the role of water in its four different compartments, including free/pore water, water loosely bound at the collagen/mineral interfaces, water tightly bound within collagen triple helices, and structural water within the mineral. This review summarizes our current knowledge of bone water across the four functional compartments and discusses how alterations in each compartment relate to mechanical changes. It provides an overview on the advent of- and improvements to- imaging and spectroscopic techniques able to probe nano-and molecular scales of bone water. These technical advances have led to an emerging understanding of how bone water changes in various conditions, of which aging, chronic kidney disease, diabetes, osteoporosis, and osteogenesis imperfecta are reviewed. Finally, it summarizes work focused on therapeutically targeting water to improve mechanical properties.