A needle-water DC microplasma system working at atmospheric pressure in N2/O2 gas mixtures is used to study the fundamental mechanisms of nitrates/nitrites synthesis in highly complex and yet little-known plasma-water systems. Plasma properties are investigated by means of optical emission spectroscopy while the activated water is analyzed following the treatment using ionic chromatography and UV-Vis absorbance spectroscopy. Experiments highlight that the energy efficiency and selectivity of the process are influenced by the oxygen content and the plasma-induced water heating, with strong differences when the water surface is the anode or the cathode electrode. Nitrates are successfully synthesized without residual nitrites in the solution with a comparatively higher energy efficiency when the water is the cathode. The possible reactions involved in the gas phase and aqueous phase chemistry are presented and future scopes for the optimization of the system are discussed.