Water-lubricated polymer is attracting more and more interest from the industry. Adding nanoparticles is considered to be an effective way to improve the tribological performance. In this work, water-lubricated Polyetheretherketone (PEEK)-steel contacts were employed as the objects of study. A careful comparative study was made by investigating the effect of adding graphene oxide (GO) into water or into PEEK. Results show that adding GO into water can significantly reduce the wear and friction coefficient of pure PEEK, which is much more effective than adding GO into PEEK. Under the lubrication of GO aqueous dispersion, the wear of PEEK remains very low even under a harsh condition where the pressure reaches 50 MPa and the linear sliding speed is 0.7 m/s. Neat PEEK and GO/PEEK composites in pure water exhibit serious wear under this harsh condition. The excellent lubricating properties of GO aqueous dispersion are attributed to GO nanosheets entering into solid contacts, which can not only form a protective layer on steel counterpart repairing the worn surface, but also strongly adhere to the PEEK matrix resulting in an in situ-formed GO coating and prevent the scratch by steel counterpart.