A comprehensive mechanistic study regarding acetone peroxides reveals that water has a profound effect on the formation of the solid cyclic peroxides, TATP, and DADP. The identification and rate of occurrence of reaction intermediates as well as compositions of the final products offer explanation for previously reported results indicating that acid type and hydrogen peroxide concentration affect the acid catalyzed reaction between acetone and hydrogen peroxide. A kinetics study of the decomposition of TATP revealed the effects of water and alcohols. They generally retard conversion of TATP to DADP and lead to complete decomposition of TATP by acid. A mechanism is proposed for the production of TATP and DADP.