Stratospheric water vapor strongly affects Earth’s radiative balance, especially in the extratropical lower stratosphere, yet large uncertainties remain regarding its variability, long-term trends and relationships to tropopause behavior. Here we characterize the seasonality, vertical structure, and variability of water vapor near the extratropical tropopause and the extratropical transition layer (ExTL). We analyze 17 years (2005–2021) of satellite observations from the Aura Microwave Limb Sounder (MLS) and the Atmospheric Chemistry Experiment Fourier transform spectrometer (ACE-FTS), with simulations from the Whole Atmosphere Community Climate Model (WACCM) using specified dynamics calculations. Analyses are performed in geometric and tropopause-relative vertical coordinates to assess the influence of coordinate on variability. Tropopause-relative coordinates substantially reduce variance in ExTL water vapor, but artificially enhance variability in the tropical upper troposphere. Tropopause-relative coordinates reveal a clear distinction between variability in the ExTL and the stratospheric overworld approximately 2.5 km above the tropopause. Above this level, there are hemispherically coherent anomalies linked to transport of air originating in the tropics. In contrast, ExTL variability lacks hemispheric coherence and likely reflects smaller-scale stratosphere-troposphere exchange. Interannual changes in ExTL water vapor show a statistically significant negative trend in both hemispheres in MLS data, but that behavior is not reproduced in ACE-FTS measurements or WACCM simulation. Despite this, the datasets agree well on overworld variability and regression responses to climate oscillations. The uncertainty in ExTL trends highlights the need for continued evaluation of long-term satellite records and improved model representation in this climatically sensitive layer.