The provenance of oxygen on the Earth and other planets in the Solar System is a fundamental issue. It has been widely accepted that the only prebiotic pathway to produce oxygen in the Earth's primitive atmosphere was via vacuum ultraviolet (VUV) photodissociation of CO2 and subsequent two O atom recombination. Here, we provide experimental evidence of three-body dissociation (TBD) of H2O to produce O atoms in both 1D and 3P states upon VUV excitation using a tunable VUV free electron laser. Experimental results show that the TBD is the dominant pathway in the VUV H2O photochemistry at wavelengths between 90 and 107.4 nm. The relative abundance of water in the interstellar space with its exposure to the intense VUV radiation suggests that the TBD of H2O and subsequent O atom recombination should be an important prebiotic O2-production, which may need to be incorporated into interstellar photochemical models.