The United States space agency NASA says salty liquid water runs down canyons and crater walls over the summer months on Mars.
It raises the chances of the potential for life on the so-called Red Planet.
The planet Mars has been the subject of intense fascination for scientists for decades.
It has captured the public imagination through literature, film and music.
Now scientists have confirmed there is more to the Red Planet than previously thought.
In the United States, NASA director of planetary science Jim Green made the announcement.
"What we're going to announce today is that Mars is not the dry, arid planet that we thought of in the past. Today, we're going to announce that, under certain circumstances, liquid water has been found on Mars."
An imager aboard the Mars Reconnaissance Orbiter confirmed the discovery by looking at dark streaks on the planet's surface.
The lead scientist for NASA's Mars Exploration Program, Dr Michael Meyer, says the streaks, called recurring slope lineae, were well-known to Mars scientists.
He says they were suspected, but not proven, to be associated with trickling water.
"For years, we've had orbital spacecraft, imaging, valleys, streaks, gullies ... All of them looked like water water was an agent, had something to do with forming them, but we didn't have any proof."
The Mars Reconnaissance Orbiter imager looked at four locations where the dark streaks were seen to come and go during the Martian summer months.
It confirmed the existence of liquid water on Mars.
For years, the mystery has been what was permitting that flow.
Frozen water has been found at the planet's poles.
Scientists noticed the flows only appear when the surface of Mars rises above minus-23 degrees Celsius.
The water can run in such frigid conditions because it is salty, lowering the freezing point of water and keeping it liquid far below zero degrees.
Dr Green says NASA's rovers have provided supporting data.
"Today, we're revolutionising our understanding of this planet. Our rovers are finding that there's a lot more humidity in the air than we ever imagined. As we ingest the soils, they're moist, they're hydrated, full of water."
Scientists remain uncertain about where the water comes from.
It may be rising from underground ice or salty aquifers, or it may condense out of the thin Martian atmosphere.
The discovery builds on previous findings that point to the possibility of life on Mars.
Planetary geologist Joe Michalski says liquid water has boosted hopes that life -- in the form of microbes -- could be present.
"Life always depends on water. So here, we have a discovery which points us to the existence of liquid water on Mars today. And that suggests that bacteria could exist in those environments even now."
NASA scientist John Grunsfeld says the discovery also raises questions about the history of Mars -- primarily, what happened to the planet that has similar features to Earth.
"From the Curiosity rover, we now know that Mars once was a planet very much like Earth, with warm, salty seas, with freshwater lakes, probably snow-capped peaks and clouds and a water cycle, just like we're studying here on Earth with our earth-science satellites, the water cycle here on Earth. But something has happened to Mars. It lost its water. But we still have -- in the atmosphere and on the surface, for the most part, but we still have -- the question of, 'Did life arise on Mars once, and can we find out?'"
