In practical applications, the lubricating performance of grease gradually deteriorates owing to the inclusion of foreign contaminants. This study investigates the impact of environmental contaminants, including silicon dioxide (SiO2) particles and water content, on the degradation of lithium-base grease and its subsequent effect on the surface damage of bearing steel material. The experimental results reveal an interactive effect between water content and particles in grease. The presence of particles and water contamination in separated or mixed conditions leads to increased friction, wear, and pitting compared to the base grease. The wear mechanisms of the two contaminant factors are different as follows: the particles predominantly function as third bodies, which enhance the oil film thickness between contacting surfaces while inhibiting the formation and growth of a protective tribofilm from the base grease, resulting in elevated friction and wear, and severe surface damage. Additionally, the addition of suitable water content in grease can absorb friction heat produced by the particles, mitigating friction and wear. Vibration exhibits behavior similar to friction, where both friction and vibration increase proportionally in the absence of water contamination. This observation suggests that vibration can be used as a valuable indicator for monitoring friction in contaminated conditions.