The effect of water on the kinetics of oxymethylene dimethyl ether (OME) synthesis from dimethoxymethane (OME1) and trioxane (TRI) has been investigated in a combined kinetic and in situ infrared spectroscopy study. The kinetic study revealed that a water content in OME1 as low as 0.21 wt % can significantly hamper the reaction rate. The apparent activation energy increased with the water ATR-IR concentration, but the frequency factor was more severely affected and decreased by an order of magnitude when the water concentration was doubled. With increasing water content, the chain growth mechanism shifted from competition between the direct insertion of TRI and the dissociation of TRI with formaldehyde incorporation, to reaction of TRI with water to form methylene glycol units which were inserted in the OME chain. The competition between water and the reactants for binding to the active sites of the zeolite was studied by means of modulated excitation attenuated total reflection infrared (ME-ATRIR) spectroscopy experiments. It demonstrated a competition for silanol sites and Bronsted acid sites (BAS) according to the binding affinity order OME1 > H2O > TRI. This trend was confirmed by a DFT study of the interaction of OME1, TRI, and H2O with BAS. Combined together, these results indicated that the presence of water inhibited the adsorption of TRI on the binding sites, which prevented OME growth. Hence, even very low levels of water must be controlled for an efficient catalytic process.