Poly(vinyl alcohol) (PVA), which has the lowest oxygen permeability among various commercial polymers, shows great potential in high-barrier packaging applications. However, the difficulty in thermal processing of PVA inhibits its use in barrier packaging because the mainstream technique for producing PVA film, i.e., solution casting, has the disadvantages of low production efficiency, long production cycle, and high operating costs. Herein, inspired by the gel spinning of PVA fibers, a moderate amount of water was utilized to achieve the gel-like extrusion of PVA, followed by biaxial stretching, to produce high-performance PVA films. The introduced water disrupted the intra-and intermacromolecular interactions in PVA and formed new hydrogen bonds with PVA molecules. As the water content increased, the proportion of nonfreezable bound water decreased and the percentage of freezable bound water increased, leading to a decrease in the melting point and glass transition temperature and an increase in the melt flowability of PVA. The extruded PVA containing 40% water exhibited an elongation at break of 504.9%, implying good stretchability. After biaxial stretching, the film strength and modulus reached 111.0 MPa and 5.4 GPa, respectively, attributed to the formed highly ordered lamellar structures and greatly improved crystallinity. More importantly, the generated well-ordered crystals provided physical barriers to block oxygen gas permeation, endowing the film with an ultralow oxygen permeability coefficient of 1.89 × 10 −18 cm 3 •cm/(cm 2 •s•Pa) and a high barrier improvement factor of 68.3, compared to commercial PET films. This high-strength and high-barrier PVA film is expected to be widely used in the packaging of food, tobacco, electronic products, textiles, and other items.