ABSTRACT Water governs both reactivity and transport in aqueous batteries, yet the occurrence of distinct free, coordinated, and network‐bound states complicates electrolyte design. Here, a quantitative water‐speciation identification (QWSI) strategy is established to resolve and quantify water populations and to correlate composition with microstructure and function. Aqueous Zn‐I 2 batteries are employed as a model system owing to the high sensitivity of capacity to water‐state distributions. Eliminating free water stabilizes electrophilic iodine species and activates the I 2 /2I + couple to realize a four‐electron conversion that doubles capacity, whereas driving water content too low depletes coordinated and network‐bound water, slows ion transport, and ultimately compromises capacity. The QWSI strategy pinpoints a critical composition at which water resides within hydrogen‐bond networks and cation solvation shells, with no detectable bulk‐like free water. Electrolytes formulated at this composition sustain four‐electron conversion while maintaining high ionic conductivity, reconciling activation of four‐electron conversion with ion transport. Consequently, the Zn//I 2 cells deliver distinct two‐plateau profiles and high reversibility, enabling an average Coulombic efficiency of 99.8% and a specific capacity of 309.1 mAh·g −1 . These findings define molecular control of water‐state distributions as a design principle, while the QWSI strategy provides quantitative descriptors for predictive control of solvation and reactivity across aqueous electrochemistry.