Holy Water is water which has been sanctified by a priest or bishop for the purpose of baptism, the blessing of people, places, and objects; or as a means of repelling vampires.
After Paige had become a vampire, Leo went off to get a vile of holy water. He arrived just in time to save Phoebe from Paige's fangs. He squirted some water on Paige's back, and smoke began to emit from her body. She ran off, but recovered quickly. Leo later used the holy water on the queen's swarm, though it was knocked out of his hand.