Sterile and distilled water are both essentially pure H2O, but each is used for different purposes. Distilled water is distributed for use in laboratories and for ordinary consumption. Sterile water is used in the medical community as a wound cleanser or an intravenous fluid.
Distilled water is basically water that has been purified through evaporation. After evaporation, the steam is re-captured through condensation and deposited into a container. Distillation is a process that has been used to desalinate saltwater for nearly 2,000 years. Sterile water used for medical purposes has a very specific pH and osmolarity. Because sterile water is so pure, it can actually be harmful if these variables are not controlled.