From the perspective of the internal evolution of the terrestrial planets, water has a significance far out of proportion to its bulk abundance. Water lowers the melting point in silicate systems and can thereby affect the location and duration of magma generation. Water alters the mechanical properties of rocks, through reductions in friction at fault interfaces and in viscosity during ductile flow. Water outgassed during large volcanic eruptions can modify planetary climate, and climate change in turn can affect planetary evolution through modification to patterns of erosion and sedimentation and through the interior thermal stresses induced by changes in surface temperature. The influence of water has been variously felt on each of the terrestrial planets. For the Moon and Mercury, water ice may reside in polar cold traps. Such ice on the Moon was derived from external sources, but internal outgassing remains a possible contributor on Mercury. On the basis of its atmospheric D/H ratio, Venus has lost most of its near-surface and atmospheric water, but continued outgassing of water is required to sustain the global cloud layer. Higher rates of outgassing of water and other volatiles during large volcanic eruptions may have resulted in large excursions in surface temperature that could have strongly modulated global patterns of deformation. Mars, too, has lost near-surface and atmospheric water, but to a lesser degree than Venus. Links between the volcanic flux history and the history of water-surface interaction on Mars suggest that volatile outgassing may have influenced the Noachian climate. The Earth is unique in that modern subduction processes recycle water into the interior. This interior water likely acts to lubricate plate boundary fault systems and to reduce asthenospheric viscosity to levels permissive of the relative plate motions observed. Whether similar recycling of water occurred earlier in the history of Mars or Venus remains an issue for evolutionary models attempting to reconcile information on crustal formation, surface age, and geological history.