Recently, the ultra-precision parts have become essential in many areas of advanced technology, including medical equipment, aircraft equipment, optical equipment and so on. These ultra-precision parts are required to have a high surface quality. Therefore, further precise machining and motion accuracy are required for the ultra-precision machine tools that machine these parts. Thus, the water-driven spindle, which is equipped with water hydrostatic bearings and a water-driven mechanism, was developed for ultra-precision machine tools. This spindle has higher stiffness than a spindle supported by aerostatic bearings. However, the heat generation due to fluid viscosity occurs at the bearings. If the temperature of each part in the spindle changes, undesirable deformation of the parts will occur. Deformation of the spindle during the machining process will then degrade the machining accuracy. In contrast, the water-driven spindle uses water as a lubricating fluid. Furthermore, water flow is supplied into the spindle in order to generate the driving power. Therefore, the water flow is an effective cooling medium for the water-driven spindle. Water cooling can be used to improve the thermal stability of the spindle because water has higher thermal conductivity and higher specific heat. In the present paper, the thermal stability of the water driven spindle is investigated experimentally. As a preliminary step, the changes in temperature of the water flow and the outer surface of the spindle are measured experimentally during spindle rotation at various rotational speeds. Furthermore, the influence of the power loss during spindle rotation on the temperature change of the water flow is investigated through calculations and experiments.