Water Electrolysis is becoming a critical enabling technology for an increasing number of space mission scenarios. It offers versatile solutions for life support, energy storage, propulsion and in-situ resource utilization (ISRU). The capability to transform water into hydrogen and oxygen will play a vital role in future space infrastructures. A fundamental understanding of the technology is therefore becoming increasingly important. This paper provides a comprehensive overview of water electrolysis for future space applications. It covers its fundamentals, applications, technology readiness and recent advancements, emphasising its critical role in future space missions. Various key applications are discussed, which are all dependent on reliable and efficient water electrolysis solutions. These include the utilisation in the oxygen generation for human spaceflight, power storage via the use of regenerative fuel cells, future propellant production on the Moon and other celestial bodies through ISRU as well as Water Electrolysis Propulsion (WEP) systems. WEP systems are one of the most promising green propulsion solutions with potential ISPs beyond 370 s. Theoretical fundamentals and performance metrics are described as well as the challenges in the development of more advanced water electrolysis systems. This paper provides a comprehensive understanding of the current state and future prospects of water electrolysis in space, offering valuable insights for researchers, engineers, and stakeholders in the space sector.