The interaction between water vapor and atmospheric aerosol leads to enhancement in aerosol water content, which facilitates haze development, but its concentrations, sources, and impacts remain largely unknown in polluted urban environments. Here, we show that the Indian capital, Delhi, which tops the list of polluted capital cities, also experiences the highest aerosol water yet reported worldwide. This high aerosol water promotes secondary formation of aerosols and worsens air pollution. We report that severe pollution events are commonly associated with high aerosol water which enhances light scattering and reduces visibility by 70%. Strong light scattering also suppresses the boundary layer height on winter mornings in Delhi, inhibiting dispersal of pollutants and further exacerbating morning pollution peaks. We provide evidence that ammonium chloride is the largest contributor to aerosol water in Delhi, making up 40% on average, and we highlight that regulation of chlorine-containing precursors should be considered in mitigation strategies.