Activation of a catalyst [IrCl(COD)(IMes)] (IMes = 1,3-bis(2,4,6-trimethylphenyl)imidazol-2-ylidene; COD = cyclooctadiene)] for Signal Amplification by Reversible Exchange (SABRE) was monitored by in situ hyperpolarized proton NMR at 9.4 T. During the catalyst-activation process, the COD moiety undergoes hydrogenation that leads to its complete removal from the Ir complex. A transient hydride intermediate of the catalyst is observed via its hyperpolarized signatures, which could not be detected using conventional non-hyperpolarized solution NMR. SABRE enhancement of the pyridine substrate can be fully rendered only after removal of the COD moiety; failure to properly activate the catalyst in the presence of sufficient substrate can lead to irreversible deactivation consistent with oligomerization of the catalyst molecules. Following catalyst activation, results from selective RF-saturation studies support the hypothesis that substrate polarization at high field arises from nuclear cross-relaxation with hyperpolarized 1H spins of the hydride/orthohydrogen spin bath. Importantly, the chemical changes that accompanied the catalyst's full activation were also found to endow the catalyst with water solubility, here used to demonstrate SABRE hyperpolarization of nicotinamide in water without the need for any organic co-solvent-paving the way to various biomedical applications of SABRE hyperpolarization methods.