Flames in hot, low oxygen environments exist in a variety of practical applications. These conditions result in significant mixing between fuel and combustion products, such as water vapour, or diluents included for emissions control. The chemical and physical effects of water vapour as a diluent are investigated in a series of ethylene flames in a jet in hot coflow burner to determine the effects on temperature and soot fields. The combined analyses of photographs, non-linear excitation regime two-line atomic fluorescence (NTLAF) of indium, planar laser-induced incandescence (LII) and one-dimensional opposed-flow flame simulations demonstrate the dominance of the chemistry, driven by the hot and vitiated oxidant, in soot reduction. Although photographs appear to suggest that both highly vitiated coflows, and highly diluted jet flames have global effect on the flames, detailed measurements reveal significantly different trends in their soot and temperature fields. The chemical contribution of water vapour as a reactant, as a third-body in ethylene decomposition and a source of H and OH in the rich mixture is further described, and trends subsequently identified, in the context of formation of polycyclic aromatic hydrocarbons and soot reduction.