A system and process for adding a photorealistic rendering of a body of water to a virtual 3D scene or image and creating a video therefrom having interactive water effects. A region of water is added to an image by adding an area depicting the original scene as it would appear if reflected by still body of water. Then, the appearance of the added water region is distorted over a series of image frames in such a way as to simulate how the reflected scene would look if the surface of the water were in motion. The water can have dynamic waves and the user can interact with the water in numbers of ways, including generating ripples on the water surface and creating rain. In addition, these effects can be achieved at full screen resolution with the use of the latest graphics hardware by employing a texture shifting technique.