The present work analyses the effect of water vapour addition on ({text {NO}_text {x}}) emissions of premixed hydrogen flames. In doing so, the adiabatic flame temperature is maintained by increasing the equivalence ratio, or alternatively increasing the unburned gas temperature, for increasing levels of water loading. Thus, it is possible to elucidate the changes in ({text {NO}_text {x}}) production at constant-temperature conditions when the mixture is diluted with water. A consistent reduction of ({text {NO}_text {x}}) emissions for increasing water dilution can be observed from 1-D premixed freely propagating flame simulations. Regarding the chemical kinetics effect of water vapour, the relative importance of different third-body reactions is examined by modifying the corresponding water collision efficiencies individually. For the chemical mechanism adopted, three reactions directly affect the nitrogen chemistry and the remaining relevant reactions are important for the flame structure and radicals concentration. The analysis stresses the importance of indirect effects like the formation and consumption of (text {O}) and (text {H}) radicals in the pre-heat zone, which enhance the subsequent formation of ({text {NO}_text {x}}) within the flame. The presence of steam can lead to a reduction of approximately (50%) in ({text {NO}_text {x}}) emissions under conditions close to stoichiometry and high water loading ((10%) by mass), compared to scenarios without water addition. Furthermore, the efficiency of water in third-body reactions significantly contributes to an emission reduction, and half of (text {NO}) emissions under the same water loading conditions at high equivalence ratio are observed when the third-body reaction efficiency is activated with respect to the case with zero efficiency. This reduction is primarily attributed to effects on radical concentrations. Finally, the chemical effect via the third-body efficiency of water is examined with respect to flame speed. It turns out that the adiabatic flame temperature plays a key role for the relative influence of the chemical kinetics effect of water dilution. A cross-over temperature is found, below which the chemical effect of water reduces the flame speed, whereas the flame speed is increased above it.