Water electrolysis is one of the most promising methods for producing high-purity and environmentally friendly hydrogen from renewable energy sources since it generates only oxygen as a byproduct with zero carbon emission. Water reduction at the cathode to generate hydrogen (H2) and water oxidation at the anode to produce oxygen (O2) in water electrolysis are both kinetically slow, resulting in low energy efficiencies. Additionally, the O2 and H2 generated by applying overpotential to dissociate water molecule are immediately put to use in fuel cells and other industrial applications. However, due to cost constraints, overall water dissociation possesses nearly 4% of global industrial hydrogen based on electrolysis of water. In recent years, though the growing demand to produce green hydrogen has boosted interest in economical alkaline water electrolysis process, however exceptional progress has been observed for PEM water electrolysis for higher efficiency and fast reaction kinetic. This chapter covers the historical background of water electrolysis, principle, thermodynamics, various water electrolysis systems, their comparative performance, kinetic mechanism, challenges, and future prospects.