The detrimental effects of water in asphalt mixtures and its manifestation as distresses in asphalt pavements were first recognised in the 1930s and have been studied extensively during the last 35 years. This deterioration process, referred to as moisture damage, is generally defined as the degradation of the mechanical properties of the material due to the presence of moisture in its microstructure. Moisture damage is a complex phenomenon that involves thermodynamic, chemical, physical and mechanical processes. This paper describes the processes by which moisture damage affects asphalt mixtures. A critique of various moisture damage mechanisms is presented, followed by a review of recent work on modes of moisture transport (i.e. water permeability, capillary rise and vapour diffusion) and their relationship to moisture damage. Special attention is given to the characterisation of void structures of asphalt mixtures, which is an important factor that influences moisture transport. Finally, the paper presents a review of existing theories on the adhesive bond between aggregates and asphalt binders and the effect of the presence of moisture at the interface. The mechanisms described in the paper are complemented by a second paper that presents recent advances in moisture damage characterisation using experimental methods, analytical-based approaches (i.e. fracture mechanics, continuum mechanics, thermodynamics and micromechanics), and numerical modelling.