Recent evidence for involvement of internal water molecules in the mechanism of bacteriorhodopsin is reviewed. Water O–H stretching vibration bands in the Fourier transform IR difference spectra of the L, M and N intermediates of bacteriorhodopsin were analyzed by photoreactions at cryogenic temperatures. A broad vibrational band in L was shown to be due to formation of a structure of water molecules connecting the Schiff base to the Thr46-Asp96 region. This structure disappears in the M intermediate, suggesting that it is involved in transient stabilization of the L intermediate prior to proton transfer from the Schiff base to Asp85. The interaction of the Schiff base with a water molecule is restored in the N intermediate. We propose that water is a critical mobile component of bacteriorhodopsin, forming organized structures in the transient intermediates during the photocycle and, to a large extent, determining the chemical behavior of these transient states.