A theory, which accounts for some recent fascinating observations, is presented for the instability and breakup of thin evaporating water films, It is proposed that the hole formation in water films is caused by the hydrophobic attraction, whereas the van der Waals interaction engenders the stability and perfect wetting beyond a critical thickness of the order of tens of nanometers. Curiously, the number density of holes may decrease with increased strength and range of the hydrophobic attraction because stronger attraction forces the onset of instability at higher thickness.