Deformational and breakage behaviors of concrete and cement mortar greatly influence various engineering structures, such as dams, river bridges, ports, tunnels, and offshore rig platforms. The mechanical and petrophysical properties are very sensitive to water content and are controlled by the liquid part in pore spaces to a large extent. The objective of this paper is to investigate the water saturation effect on the strength characteristics and deformability of cement mortar under two loading conditions, static and dynamic compression. A set of cement mortar samples was prepared and tested to study the mechanical behavior in dry and saturated states. The first part of the research incorporates the study of static mechanical properties for dry and brine-saturated cement mortar through uniaxial compressive strength tests (UCS). Second, drop-weight impact experiments were carried out to study the dynamic mechanical properties (impact resistance, deformation pattern, and fracture geometry) for dry and saturated cases. The comparative analysis revealed that water saturation caused substantial changes in compressive strength and other mechanical characteristics. Under static loading, water saturation caused a reduction in strength of 36%, and cement mortar tended to behave in a more ductile manner as compared to dry samples. On the contrary, under dynamic loading conditions, water saturation resulted in higher impact resistance and fracture toughness as compared to dry conditions. In addition, fractures could propagate to smaller depths as compared to dry case. The study will help resolve many civil, mining, and petroleum engineering problems where cement structures undergo static as well as dynamic compression, especially in a hydraulic environment where these structures interact with the water frequently. To the best of our knowledge, the effect of water saturation on the dynamic mechanical properties of cement mortar has not been well understood and reported in the literature.