A hydrated EGR system, method and apparatus for a vehicle, in which heat from an exhaust pipe is used to heat an aqueous fluid solution in a water tank. A portion of the hot exhaust gas is diverted from the main exhaust flow, and the diverted portion is bubbled through the heated aqueous fluid solution to form a hydrated EGR mixture containing water vapor. The hydrated EGR mixture is then fed back to an intake portion of the engine, is mixed with an incoming fuel/air mixture, and is burned with the fuel air mixture inside the engine. The use of the hydrated EGR mixture, including heated water vapor, as part of the intake charge simultaneously reduces harmful exhaust emissions, improves engine performance, and improves fuel economy of the vehicle.