The physics of nonequilibrium microplasmas produced by electrical discharges in saline environments are described. Electrosurgical devices employing such discharges are finding increased use in surgical procedures requiring fine control of the tissue excision, cauterization, or debulking process. Optical spectroscopy, electrical diagnostics and gas analysis are the primary experimental methods used to study the plasmas. Water is dissociated in the plasma by electron impact processes principally into chemically‐active atomic hydrogen and hydroxyl radicals, which can subsequently interact with fibrous collagenous tissue surfaces to cut and coagulate tissue. The molecular potential energy curves of water are used to explain some features of the plasma‐induced chemistry. The Franck‐Condon principle is used to show that the fragments from electron‐impact‐dissociated water can possess excess kinetic energy, thereby enhancing their surface reactivity. Energetic electrons from the plasma can also interact directly with the tissue surface and cause fragmentation of surface proteins. Chemical kinetics simulations of water vapor periodically irradiated by energetic electrons shows that many chemical species are formed, including reactive radicals that may play a role in tissue modification useful for surgical procedures. (© 2007 WILEY‐VCH Verlag GmbH & Co. KGaA, Weinheim)