The residual water and amphiphilic compounds such as phospholipids in bulk oil can form reverse micelles, which affect oxidative stability. In this study, the Antarctic krill oil (AKO) samples with different water contents were subjected to accelerated storage. During storage, AKO exhibited oxidative changes, manifested as increased POV, TBARS values, and volatile compound levels but decreased PUFA percentages. Meanwhile, AKO underwent hydrolysis, evidenced by decreased PC, PE, and TG contents but increased FFA contents. Moreover, the degree of lipid oxidation and hydrolysis is dose-dependent with water added. Cryogenic scanning electron microscopy imaging and micelle size distribution measurement proved the presence of reverse micelle, and their size and interfacial area improved with increased water contents. Correlation analysis suggested that lipid oxidation and hydrolysis positively correlated with the size and interfacial area of reverse micelle. Therefore, it is speculated that the oil-water interface may be the site of lipid oxidation and hydrolysis.