The effects of water injection (WI) on combustion characteristics were investigated in an optically accessible light-duty engine retrofitted with a side-mounted water injector. The main objective was to study the effect of water injection on autoignition and subsequent combustion process in compression ignition (CI) engines. Numerical zero-dimensional simulations were first performed to separate the thermal from the kinetic effects of water on the ignition delay and maximum temperature reached by a reacting mixture. Then, experimental investigations were performed at different intake temperatures and levels of thermal stratification achieved via direct water injection. Combustion analysis was performed on cylinder pressure data to study the effect of water injection on the overall combustion process. Infrared (IR) imaging was performed to provide insight to how water injection and the resulting water distributions affect thermal stratification, autoignition, and combustion characteristics. A new method in quantifying the water distributions is suggested. The results show that the overall level of stratification is sensitive to water injection timing and pressure, where increased water injection pressures and advanced injection timings result in more homogenous distributions. Moreover, water injection was found to affect the location of ignition kernels and the local presence of water suppressed ignition. The level of water stratification was also observed to affect the combustion process, where more homogenous distributions lost their ability to influence ignition locations. Finally, the infrared images showed high levels of residual water left over from prior water-injected cycles, suggesting that hardware configurations and injection strategies must be optimized to avoid wall wetting for stable engine operation.