A direct current atmospheric pressure cold plasma microjet (PMJ) was used to produce plasma activated water (PAW) in two generation modes above (PAW‐A) and beneath (PAW‐B) the water surface. The physicochemical characteristics and biological effects of them were measured respectively. Results showed that PAW‐B exhibited stronger disinfection efficiency than PAW‐A, which was associated with ORP and conductivity, but not pH value, temperature, H2O2, NO3− or NO2−. Furthermore, the cell membrane integrity and membrane potential of S. aureus were destroyed more severely by PAW‐B. More importantly, a significant increase of intracellular ROS was induced by PAW‐B, which was supposed to contribute most to the sterilization. This work provides valuable guidance for the production and wide applications of PAW.