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While the oxidation stability of environmentally friendly hydraulic fluids has been markedly improved, the controllability of hydrolysis is still poor. A research project IFAS has taken up this problem. The aim was to prevent the water entry and to diminish the water content of hydraulic fluids by changes in reservoir design and separation devices. An essential point of interest was the development of low-cost solutions suitable for the refit of existing mobile machines. The ability to separate water is primarily determined by its degree of solubility in the respective fluid. The only method that will keep the water content in a hydraulic fluid far below its saturation point is vaporization into the surrounding atmosphere. An attractive application of this principle is the separation within the reservoir. The heat of the oil vaporizes the water, transporting it into the gas phase which may then be removed by exchange with the outside air.