In physical chemistry and in engineering, steam refers to vaporized water. It is a pure, invisible gas (for mist see below), which at standard atmospheric pressure has a temperature of around 100 degrees celsius, and occupies about sixteen hundred times the volume of liquid water.

Superheated steam is steam heated well beyond its boiling point (saturation temperature).

When liquid water comes in contact with a very hot substance (such as lava) it can flash into steam very quickly; this is called a steam explosion.

A steam engine uses the expansion of steam to drive a piston or turbine and so to perform mechanical work. In other industrial applications steam is used as a repository of energy, which is introduced and extracted by heat transfer, usually through pipes. Steam is a capacious reservoir for energy because of water's high heat of vaporization. The ability to return condensed steam as water-liquid to the boiler at high pressure with relatively little expenditure of pumping power is also important. Engineers use an idealised thermodynamic cycle, the Rankine cycle, to model the behaviour of steam engines.

In the U.S., more than 90% of the power is produced using steam as the working medium, mainly by steam turbines. Condensation of steam to water often occurs at the low-pressure end of a steam turbine, since this maximises the energy efficiency, but such wet-steam conditions have to be carefully controlled to avoid excessive blade erosion.

In common speech, steam most often refers to the white mist that condenses above boiling water as the hot vapor ("steam" in the first sense) mixes with the cooler air. After gaseous steam has intermixed with air, it is no longer properly called steam and is instead referred to as water vapor.

The International Association for the Properties of Water and Steam (IAPWS), maintains international-standard correlations for the thermodynamic properties of steam, including IAPWS-IF97 (for use in industrial simulation and modelling) and IAPWS-95 (a general purpose and scientific correlation).