Filters water as you brew. We have been Keurig customers for years. We've used filtered water in our machines and it's helped keep them from getting lime scale build-up. It's nice having the filter built right into the water reservoir. Yes, as many other commenters have mentioned, it's more expensive than filtering your own water or buying distilled or filtered water. You're paying for the convenience of having the filtering system right in your coffee pot. This is my 3rd (I think) Keurig coffee system. Each one has had an improvement from the last. Between the filter & the carafe I think this system will be a winner - pricey but still a winner! You just have to watch for sales for what you need.