Poly(vinyl alcohol), PVOH, films have been studied as a function of water content. The states of water present in the polymer (bound or free) have been characterized and are a function of water content. The effects of water content (and hence state) on the free volume, chain mobility, and glass transition (Tg) behavior have been studied by positron annihilation lifetime spectroscopy, 13C solid state nuclear magnetic resonance, and dynamic mechanical analysis. The addition of approximately 30 wt % water results in a marked increase in free volume cavity size and polymer chain mobility and a corresponding decrease in Tg. The water is in a molecular, nonfreezable state for water additions up to approximately 30 wt %, hence it is postulated that nonfreezing water is responsible for the majority of the plasticization in this system. The plasticization is attributed to the increasing free volume and lubrication provided as the water swells the polymer and disrupts polymer-polymer hydrogen bonding. A limited equivalence between the action of water on the polymer and the action of temperature (thermal energy) is proposed.