Process for preparing polymer, e.g. polystyrene, particles that may not or may contain a water-retaining agent and that require only a one-step process for incorporating the water-retaining agent. The polymer particles may be prepared via an extrusion process, or a bulk polymerization process wherein a water-retaining agent is blended into the polymer melt. Water is incorporated into the particles by soaking them in hot or cold water or treating the particles with steam for a predetermined time depending on the desired water content in the particles. The water-retaining agent may be starch, zeolite, silica dioxide or poly (N-isopropyl acrylamide) ranging from 0.1% to 10.0% by weight. The particles can be expanded via appropriate means to form pre-expanded or expanded particles in a conventional manner.