Global population growth accelerated significantly in the early twentieth century, increasing from approximately 1.6 billion in 1900 to over 2.5 billion by 1950. This growth coincided with the discovery of artificial nitrogen fixation methods. The Haber-Bosch process, the primary method for ammonia synthesis (NH3) and nitrogen-containing fertilizers relies on natural gas (CH4), bringing significant environmental and economic challenges. A shift toward sustainable, low-CO2 fertilizer production is necessary, with non-equilibrium plasma technology offering a promising green alternative for local nitrogen fixation. However, the use of water as a hydrogen source in plasma-based nitrogen fixation presents specific challenges related to physics (electron energy distribution and interaction) and chemistry (reaction pathways), which directly impact process efficiency and product yield. This chapter discusses the underlying scientific problems and explores the challenges and the role of water in plasma-based nitrogen fixation from the perspectives of physics, chemistry, and engineering.