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The bottle is mostly filled with water and sealed. The bottle is then pressurized with a gas, usually air compressed from a bicycle pump, air compressor, or cylinder up to 125 psi, but sometimes CO2 or nitrogen from a cylinder.

A student who tests a water rocket launch.

Water and gas are used in combination, with the gas providing a means to store potential energy, as it is easily compressed, and the water increasing the mass fraction and providing greater momentum when ejected from the rocket's nozzle. Sometimes additives are combined with the water to enhance performance in different ways. For example: salt can be added to increase the density of the reacton mass resulting in a higher specific impulse. Soap is also sometimes used to create a dense foam in the rocket which lowers the density of the expelled reaction mass but increases the duration of thrust. It is speculated that foam acts as a compressible liquid and enhances the thrust when used with De Laval nozzles.

The seal on the nozzle of the rocket is then released and rapid expulsion of water occurs at high speeds until the propellant has been used up and the air pressure inside the rocket drops to atmospheric pressure. There is a net force created on the rocket in accordance with Newton's third law. The expulsion of the water thus can cause the rocket to leap a considerable distance into the air.

In addition to aerodynamic considerations, altitude and flight duration are dependent upon the volume of water, the initial pressure, the rocket nozzle's size, and the unloaded weight of the rocket. The relationship between these factors is complex and several simulators have been written by enthusiasts to explore these and other factors.

Often the pressure vessel is built from one or more used plastic soft drink bottles, but polycarbonate fluorescent tube covers, plastic pipes, and other light-weight pressure-resistant cylindrical vessels have also been used.

Typically launch pressures vary from 75 to 150 psi (500 to 1000 kPa). The higher the pressure, the larger the stored energy