The stability of Sn-Beta for the continuous upgrading of hexoses is improved dramatically upon the addition of small amounts of water to the methanol/sugar reaction feed, despite water itself being an unfavorable solvent. Herein, the molecular level origin of this effect is investigated. Spectroscopic studies of the catalytic materials pre-, post- and during operation, with operando UV–vis, 119Sn CPMG MAS NMR, DRIFTS-MS, TGA, TPD/O-MS, and porosimetry, are coupled to additional kinetic studies, to generate detailed structure–activity–lifetime relationships. In doing so, we find that the addition of water influences two particular processes—fouling and active site modification. However, mitigating the second is the most crucial role of water. Indeed, in the absence of water, the loss of Sn–OH and Si–OH sites occurs. Notably, these changes in active site hydration correlate to deactivation and reactivation of the system. The consequences of these findings, both for mechanistic understanding of the system and to the design of alternative regeneration methods, are also discussed.