Ginsenoside Rg5, a secondary ginsenoside derived from the degradation of protopanaxadiol saponins, exhibits various pharmacological activities, including anticancer, anti-inflammatory, antidiabetic, and memory-enhancing effects, making it a promising candidate for natural medicine. However, research on the stability of Rg5, particularly in aqueous solutions, remains limited. This study systematically investigates the stability of ginsenoside Rg5 in water by monitoring its degradation over time under controlled conditions. The stability of the Rg5 aqueous solution was assessed by investigating the influences of temperature and time, employing high-performance liquid chromatography (HPLC) analysis to evaluate its degradation. The findings indicated substantial degradation of Rg5, with approximately 95% decomposition observed after a period of 10 days. The decomposition products were isolated using preparative liquid chromatography and identified through high-resolution mass spectrometry (HR-MS), NMR, and induced circular dichroism (ICD) analyses. A novel derivative was identified, and its degradation pathway was elucidated, encompassing oxidation, hydrolysis, and dehydration processes that culminated in the formation of four distinct stereoisomers. This study elucidates the instability of Rg5 in aqueous environments and offers significant insights into its decomposition mechanism. The findings emphasize the critical importance of optimizing storage conditions and minimizing exposure to water and oxygen to enhance the stability of Rg5, thereby advancing its potential applications in pharmaceutical development and storage.