High-water-cut crude oil is currently the main form of underground oil in China. The high water content and the distribution of oil and water have an important impact on the rheological property and exploration efficiency. Terahertz (THz) waves are extremely sensitive to hydrogen bonds and intermolecular forces, and consequently, the responses of oil, water and air exhibit obvious differences. In this work, a series of crude oils with high water content were investigated by using THz time domain spectroscopy (THz-TDS). Linear models were built between amplitudes of THz-TDS and the absorbance and water content from 50.05% to 100.00% with correlation coefficients (R) of 0.99 and >0.93, respectively. In addition, oil and water were determined to be distributed at different positions, based on THz signals in a series of oriented scans. Moreover, the transparent parts for visible light are identified by scanning the local points. The positions with low and high THz intensities refer to water and air regions, respectively. Therefore, THz technology is expected to act as a supplementary method to characterize high-water-cut crude oil, which will promote the efficiency and safe operation of pumping units and oil pipelines.