Loss of braking power and rubber skidding on a wet road is still an open physics problem, as neither the hydrodynamic effects nor the loss of surface adhesion that are sometimes blamed really manage to explain the 20-30% observed loss of low-speed tyre-road friction. Here we report a novel mechanism based on sealing of water-filled substrate pools by the rubber. The sealed-in water effectively smoothens the substrate, thus reducing the viscoelastic dissipation in bulk rubber induced by surface asperities-well established as a major friction contribution. Starting with the measured spectrum of asperities one can calculate the water-smoothened spectrum and from that the predicted friction reduction, which is of the correct magnitude. The theory is directly supported by fresh tyre-asphalt friction data.