Characterization of a water plasma was carried out in a range of water vapor flow rate of 0.1 to 2.2 mmol/h in a radio frequency discharge, in order to study its properties as either an oxidizing or a reducing agent in heterogeneous reactions with different liquid hydrocarbons. The variation of relative population of the species in the plasma, namely .H, 0(P-3), and .OH, was studied by optical emission spectroscopy by varying the flow rate, at a fixed radio frequency power of 100 W. Reactions with liquid hydrocarbons, such as fuel residuals and organic compounds with similar functionalities, were performed. Hydrogenation products were the most abundant at low flow rates, whereas oxidation was the prevalent process at moderate-to-high flow rates, alcohols, carbonyl compounds, epoxides and phenols being the products, depending on the starting substances. The cetane number of a light gas oil, containing 89.75% of alkanes, 5.57% of aromatics, and 4.68% of olefins, was improved by 59% after 8 h treatment at 0.071 mmol of water per hour.