This study analyzed the thermal balance of a turbocharged gasoline direct injection engine with intake air humidification and studied the reason why intake air humidification improved the thermal efficiency of the basic engine. The results showed that since the evaporation of the introduced water absorbed heat in the intake port that caused the decrease of the temperature of the intake air, and the specific heat capacity of working medium increased with intake air humidification. Therefore, an apparent decrease in the in-cylinder temperature. Each energy loss can be affected by intake air humidification in different degrees, among which the exhaust loss and heat transfer loss decreased evidently, while pumping loss and friction loss increased to some extent. Furthermore, the sum of the decrease of exhaust loss and heat transfer loss was higher than the sum of the increase of pumping loss and friction loss, hence, the thermal efficiency of the basic gasoline engine increased when the benefit gained from intake air humidification was greater than the negative impact.