Hydrothermal processing is an important thermochemical conversion process that is used to convert biomass into valuable products or biofuel. The process is usually performed in water at 250-374 degrees C under pressures of 4-22 MPa. The biomass is degraded into small components in water. Based on the target products, i.e., bio-oil, bio-gas or bio-carbon, the process conditions (temperature, pressure and time) are chosen. There has been significant effort in evaluating various biomass resources for hydrothermal processing because the process is suitable for any type of biomass including the co-utilization of biomass with waste materials. Additionally, because most biomass resources have high moisture contents, the most efficient way to process them is through hydrothermal processing. To understand hydrothermal biomass processing and the degradation pathway of biomass, it is necessary to understand the properties of water under hydrothermal conditions (i.e., subcritical and supercritical). In this respect, the physicochemical properties of water under subcritical and supercritical conditions and the interactions of water with biomass are discussed in the present paper.