One extremely promising approach for turning biomass into useful chemicals and fuels is hydrodeoxygenation (HDO). In the hydrodeoxygenation reaction of biomass and its platform chemicals, water can be used as a reactant or cocatalyst on one hand, thus significantly enhancing the catalytic reaction speed and product selectivity. On the other hand, it is green, nontoxic, and inexpensive. Notably, water is also often reported as a destructive factor. Therefore, the optimal functioning of the catalysts can be efficiently sustained by rationally utilizing the physicochemical interaction between the catalysts and water. This study reviews the regulation of activity, selectivity, and stability of biomass hydrodeoxygenation reactions using various catalysts (noble metal catalysts, transition metal catalysts, etc.) in the aqueous environment. The catalyst structure is optimized by adding metal particles, heteroatom doping modification, and other methods, which combine the complementary effect of water and catalyst to accomplish the regulation effect. The stability of the catalysts is further discussed, and methods to improve the resistance to deactivation are summarized. At last, the perspectives are put forth for the purpose of advancing and enhancing future development.