How does water cool you down?

Water is great at removing heat through evaporation. water on the surface of your skin quickly absorbs heat in order to evaporate back into the surrounding air. The absorption of this heat creates a cooling effect on your skin as heat energy is taken from your body!  Sweat, does the same, only this is the body excreting water through your pours. The process in both is accelerated by air movement, this is why a fan makes you feel cooler especially when your skin is moist. If the room air is saturated with water vapor, the cooling effect becomes less efficient as water cannot evaporate so effectively.