Water-induced strength reduction is one of the most critical causes for rock deformation and failure. Understanding the effects of water on the strength, toughness and deformability of rocks are of a great importance in rock fracture mechanics and design of structures in rock. However, only a few studies have been conducted to understand the effects of water on fracture properties such as fracture toughness, crack propagation velocity, consumed energy, and microstructural damage. Thus, in this study, we focused on the understanding of how microscale damages induced by water saturation affect mesoscale mechanical and fracture properties compared with oven dried specimens along three notch orientations-divider, arrester, and short transverse. The mechanical properties of calcite-cemented sandstone were examined using standard uniaxial compressive strength (UCS) and Brazilian tensile strength (BTS) tests. In addition, fracture properties such as fracture toughness, consumed energy and crack propagation velocity were examined with cracked chevron notched Brazilian disk (CCNBD) tests. Digital Image Correlation (DIC), a non-contact optical measurement technique, was used for both strain and crack propagation velocity measurements along the bedding plane orientations. Finally, environmental scanning electron microscope (ESEM) was employed to investigate the microstructural damages produced in calcite-cemented sandstone specimens before and after CCNBD tests. As results, both mechanical and fracture properties reduced significantly when specimens were saturated. The effects of water on fracture properties (fracture toughness and consumed energy) were predominant in divider specimens when compared with arrester and short transverse specimens. Whereas crack propagation velocity was faster in short transverse and slower in arrester, and intermediate in divider specimens. Based on ESEM data, water in the calcite-cemented sandstone induced microstructural damages (microcracks and voids) and increased the strength disparity between cement/matrix and rock forming mineral grains, which in turn reduced the crack propagation resistance of the rock, leading to lower both consumed energy and fracture toughness ($K_{IC}$).