Herschel/HIFI observations of water from the intermediate mass protostar NGC 7129 FIRS 2 provide a powerful diagnostic of the physical conditions in this star formation environment. Six spectral settings, covering four (H2O)-O-16 and two (H2O)-O-18 lines, were observed and all but one (H2O)-O-18 line were detected. The four (H2O)-O-16 lines discussed here share a similar morphology: a narrower, approximate to 6kms(-1), component centered slightly redward of the systemic velocity of NGC7129 FIRS 2 and a much broader, approximate to 25 km s(-1) component centered blueward and likely associated with powerful outflows. The narrower components are consistent with emission from water arising in the envelope around the intermediate mass protostar, and the abundance of H2O is constrained to approximate to 10(-7) for the outer envelope. Additionally, the presence of a narrow self-absorption component for the lowest energy lines is likely due to self-absorption from colder water in the outer envelope. The broader component, where the H2O/CO relative abundance is found to be approximate to 0.2, appears to be tracing the same energetic region that produces strong CO emission at high J.