By employing the truncated adiabatic basis set (TAB) description developed in the preceding article [B. D. Bursulaya and H. J. Kim, J. Chem. Phys. 108, 3277 (1998), preceding paper], solvent water under an ambient condition is studied via a molecular dynamics (MD) computer simulation method. The evolving charge distribution of each water molecule is described by the mixing of the TAB functions, which fluctuates with its local environment. The parametrization of these basis functions is couched in terms of the complete active space self-consistent field (CASSCF) ab initio calculations in vacuum. By using an interaction site representation for the diagonal and overlap charge distributions of the basis functions, electronic polarizability both in and out of the water molecular plane is accounted for. The ground-state charge distribution for the entire solvent system is determined at the self-consistent field (SCF) level with a numerical iteration method. Two different models, TAB/10 and TAB/10D, are studied. The average water dipole moment in liquid is found to be 2.58 D for the former and 2.65 D for the latter, while it is 1.85 D in vacuum for both models. The solution-phase electronic polarizability distributions, characterized by a narrow but finite width, show that nonlinear hyperpolarizability makes a non-negligible contribution to instantaneous electronic response of water even though its average response mainly falls in a linear regime. It is found that the TAB water predictions for structural, dynamic, spectroscopic, dielectric, and transport properties are in good agreement with corresponding experimental results.