Storing larger amounts of energy is becoming critical as more renewable and intermittent energy sources emerge in our society. Li-O₂ batteries have the highest theoretical energy density, but there are still barriers to overcome. The presence of water in atmospheric air makes studying its effects on battery performance necessary if ambient oxygen ought to be used in such devices. This paper investigates the effect of different concentrations of water in the electrolyte of Li-O₂ aprotic batteries, on deep discharge capacity and cyclability. Batteries were prepared with a metallic lithium anode, glass microfiber membrane, 0.1 M LiClO₄/DMSO electrolyte with various water concentrations (15-144,000 ppm), and carbon paper cathode. An increase in discharge capacity of >300% was achieved with 550 ppm of water; however, a gradual reduction in cyclability was observed increasing water concentration. We show that it occurs due to changes in the reaction mechanism, composition, and morphology of the discharge products, incomplete decomposition, and formation of a passivating film on the metallic lithium anode. Moreover, this article elucidates the causes underlying the involved mechanism and highlights the double-edged effect of water on the electrochemical performance of Li-O₂ batteries, causing improvements in deep discharge capacity at the cost of reduced cyclability.