Although it is well known that water is essential for human homeostasis and survival, only recently have we begun to understand its role in the maintenance of brain function. Herein, we integrate emerging evidence regarding the effects of both dehydration and additional acute water consumption on cognition and mood. Current findings in the field suggest that particular cognitive abilities and mood states are positively influenced by water consumption. The impact of dehydration on cognition and mood is particularly relevant for those with poor fluid regulation, such as the elderly and children. We critically review the most recent advances in both behavioural and neuroimaging studies of dehydration and link the findings to the known effects of water on hormonal, neurochemical and vascular functions in an attempt to suggest plausible mechanisms of action. We identify some methodological weaknesses, including inconsistent measurements in cognitive assessment and the lack of objective hydration state measurements as well as gaps in knowledge concerning mediating factors that may influence water intervention effects. Finally, we discuss how future research can best elucidate the role of water in the optimal maintenance of brain health and function.