You have to understand that water comes in different forms, or states of matter. There's liquid water, solid water (ice), and water as a gas (water vapor).

Water is constantly being recycled in the water cycle. Here's how it works:

Let's say you're painting with watercolors. The paint is wet when you brush it onto the paper, but later it dries. Why? The water molecules in the paint escaped into the air. (They evaporated.) These water molecules floating in the air are called water vapor. You can't see them, but they are there. When the water molecules in the paint escape into the air, only the color remains on the paper.

What happens next? Well, when warm air containing water vapor hits something cool, the water molecules turn into a liquid. (They condense.) That's why drops of water collect on the outside of a cool glass. The cool air close to the glass causes water molecules in the air to slow down and condense against the side of the glass.

The back and forth process of evaporation and condensation is called the water cycle, and it is how the earth recycles water. When the sun warms the earth, water evaporates into the air. As the water vapor rises and meets cooler air, it condenses back into water again, forming clouds and rain which falls to the surface of the earth.