Electrolysis of water is the electrochemical decomposition of water (H2O) into oxygen (O2) and hydrogen gas (H2) with the aid of an electric current. Water electrolysis takes place inside an electrolytic cell. An electrolytic cell in its prototypical form consists of three components: an electrolyte and two electrodes (a cathode and an anode). Driven by an external voltage applied to the electrodes, the electrolyte provides an ion flux to and from the electrodes. At the electrodes charge-transferring reactions take place.

The overall reaction for water electrolysis is:

 H2  H2 + ½O2

Whereas the half-cell reactions taking place at the positive electrode (anode) and negative electrode (cathode) are:

H2O  ½O2 + 2H+ + 2e-       (anode reaction)

2H+ + 2e-  H2                    (cathode reaction)

In order to effectively separate the produced H2 and O2, one type of electrolyser employs a polymer electrolyte membrane (PEM). The (Faradaic) efficiency of the electrolysis process may be calculated as the higher heating value (HHV) of one mole of the product divided by the energy consumption used to produce one mole of the product. Conversion efficiencies of over 80% can be achieved.