By-products of the hydrolysis reaction in the copper-chlorine thermochemical cycle for hydrogen production are key to the final thermal and hydrogen efficiency. The current study focuses on the influences of reaction time, temperature, and steam partial pressure on the hydrolysis reaction and by-product formation mechanism via experimental and multiple analytical methods. The result demonstrates that the hydrolysis reaction of CuCl2 and steam converts to CuCl and Cu2OCl2, with a high conversion of 97%, while the Cu2OCl2 and CuCl2-CuO product mixtures exhibit interconversion capabilities. The increase of temperature increases the CuCl product content, while the decrease of steam partial pressure increases the by-product CuCl2. Particle morphology and reaction thermodynamics are analyzed for main and by-products formation. Finally, the homogeneous reaction model and shrinking core model are used and compared for the activation energy of the formation of Cu2OCl2 for the hydrolysis reaction and the effect of by-products.