Liquid cell electron microscopy has emerged as a powerful technique for in situ studies of nanoscale processes in liquids. An accurate understanding of the interactions between the electron beam and the liquid medium is essential to account for, suppress, and exploit beam effects. We quantify the interactions of high energy electrons with water, finding that radiolysis plays an important role, while heating is typically insignificant. For typical imaging conditions, we find that radiolysis products such as hydrogen and hydrated electrons achieve equilibrium concentrations within seconds. At sufficiently high dose-rate, the gaseous products form bubbles. We image bubble nucleation, growth, and migration. We develop a simplified reaction-diffusion model for the temporally and spatially varying concentrations of radiolysis species and predict the conditions for bubble formation by H2. We discuss the conditions under which hydrated electrons cause precipitation of cations from solution and show that the electron beam can be used to "write" structures directly, such as nanowires and other complex patterns, without the need for a mask. © 2013 American Chemical Society.