The mechanism of the topotactic reaction of superconducting YBa2Cu3O7 thin films with water vapour is shown to be strongly influenced by the reaction kinetics. At elevated temperatures a quasi-continuous transition is observed while at lower temperatures a discontinuous transformation occurs with two phase regions and the appearance of a new superconducting metastable intermediate. The latter can be described as a second stage compound. Models are discussed - based primarily on diffraction and spectroscopic data - for the changes observed in structure and stoichiometry in order to understand the complex reaction mechanism of this low temperature solid state process and the effects on the electronic properties of the thin layer material.