Oxidation of dilute methane in oxygen containing mixtures by atmospheric pressure dielectric barrier discharge at moderate temperature (below 150A degrees C) has been studied with regard to the effect of water vapor. First, the impact of water vapor on methane conversion was studied in nitrogen. In dry nitrogen, methane was converted into hydrogen cyanide and hydrogen in the absence of oxidant. When water was added, it both acted as a scavenger in competition with methane for reactive nitrogen species and changed the reaction product speciation from HCN to carbon monoxide and carbon dioxide. The addition of water also led to the formation of hydrogen and nitrogen oxides. In the presence of oxygen, the addition of 1% water vapor enhanced methane conversion. Increasing water vapor content above 1% had a slight positive effect on methane conversion, and was found to enhance selectivity of the reaction products toward carbon dioxide over carbon monoxide.