Water avens is closely tied to wet habitats. It grows along waterways, in ditches, marshes, and peatlands, and thrives in cool, organic-rich soils. It can also be found in deciduous, mixed, and boreal forests (when conditions are suitable).
This species is considered circumboreal (meaning it occurs across the Northern Hemisphere). It is found in cool, moist temperate forests in Europe. In North America, it occurs in the northern United States. In Canada, it grows in Ontario, the Atlantic provinces, and as far west as the Prairies.
It is found mostly in the St. Lawrence Lowlands and from the Appalachians to the Gaspé region. It can sometimes be found as far north as the tree line in Québec.