Zeolites offer many benefits as a catalyst. The adjustable acid sites in zeolites and its well-defined pore structure allows for a fine-tuning of the catalytic performance. The activity and selectivity of several reactions have been shown to be dependent on the location and distribution of the acid sites in the zeolite. However, the underlying mechanisms responsible for this dependence remain to be explored. In this thesis, using density functional theory (DFT) calculations, the impact of proximity of Brønsted acid sites in zeolite HZSM-5 as well as the role of water in enhancing catalytic reactions is investigated. It is found that Brønsted sites with close spatial proximity can significantly strengthen the adsorption of water, which is used as a molecular probe for the local activity. It is shown that a water molecule can form H-bonds with two adjacent sites with increased adsorption energy. Following on this, ab initiomolecular dynamics simulations are used to analyze water interactions with acid sites, and the charge stabilizing effect of water clusters are shown. This charge stabilization as well as the polarization effect of nearby acid sites are proposed as the causes behind a series of water enhanced reactions at zeolites with high acid site densites. The catalytically beneficial effects of water cluster interaction and acid site polarization of n-hexane cracking in HZSM-5 was studied using DFT Nudged Elastic Band (NEB) kinetic barrier calculations. Water showed potential for reaction enhancement, appearing to stabilize the charged intermediate by forming hydrogen bonds with the reverse zeolite wall. Nearby acid sites also showed enhancement. One would polarize the hexane while the other participated in the protonation. With the two beneficial effects in combination the benefits compounded, with a greater result than the sum of their parts. The results are far from conclusive but they are very promising if consistent enhancement can be achieved.