When we heat water, it starts to evaporate. At first, it evaporates only from the surface, and when it reaches the boiling point, it evaporates from its entire volume. The water changes from a liquid to the gaseous state called steam. At some point, an equilibrium is established. As many molecules evaporate from the water as condense back into it. The steam thus obtained is called saturated steam. It is used to conduct heat and in many other applications. The higher the pressure in the boiler, the higher the temperature of the steam, and the more energy it will contain per kilogram of steam. By changing the pressure of saturated steam, its temperature also changes.

Graph of the dependence of the water state on pressure and temperature. The atmospheric pressure and the boiling and freezing point of water at this pressure are shown in dashed green lines.

Very often we also encounter the term dry steam to express that the steam contains only molecules in the gaseous state. In reality, however, most of the steam produced by boiling water is wet steam (or unsaturated steam). Boiling releases tiny droplets of water that are carried away with the steam. Even the best boiler generates steam containing 3—5 percent moisture.

Dry steam can become wet if it cools down, for example when it is released from a pipe into the atmosphere. By rapid cooling, it partially condenses into tiny water droplets. If we see white clouds of steam escaping from, say, the valve of a steam locomotive or a kettle, it is always wet steam. The white colour is caused by the tiny droplets. Dry steam is not visible.

Wet steam can cause a number of problems in a thermal power plant. It will reduce the amount of energy that the steam can carry, it can flow down pipes and corrode them, and it can cause wear on turbine blades. That is why moisture separators are important to keep the steam free of droplets and dry.

A special kind of steam is flash steam. It is created when hot condensate is released. A sharp drop in pressure evaporates part of the condensate. The energy that the pressurized hot water has does not allow it to remain liquid when the pressure is decreased, so some of the energy is used for condensation. In principle, it is simply wet steam though, containing water droplets from the very beginning.

Superheated steam is formed from saturated steam when the steam is heated without the presence of liquid above the saturated steam point of 374 °C. This produces steam that has a lower pressure and density than saturated steam at the same temperature. This type of steam is used to drive turbines because it has a higher energy density than saturated steam. Because it has a high temperature, its use requires more resistant materials. In superheated steam, the temperature is not dependent on pressure (as long as it is superheated), so it does not immediately condense with a change in pressure and thus is not visible.

If the steam exceeds the critical point, i.e. a pressure of 22.1 MPa and a temperature of 374 °C, supercritical water is obtained. In this state it is impossible to distinguish whether it is a liquid or a gas by the behaviour of the molecules. This specific type of steam is also sometimes used to drive turbines.