By replacing volatile and flammable organic-based electrolytes with gel electrolytes, dye-sensitized solar cells (DSSCs) may be a viable and more practical alternative to other clean energy sources. Although they present a promising alternative, gel electrolytes still have some drawbacks for practical applications, such as low ionic conductivity and infusion difficulties into the pores of the working electrode. Here, we introduce a new one-step fabrication method that uses a lyotropic liquid crystalline (LLC) gel electrolyte (LiI:I2:H2O:C12H25(OCH2CH2)10OH) and a dye (N719) to construct a DSSC that performs (7.32%) 2.2 times better compared with a traditional two-step production. Water plays a key role in the gel electrolyte, where the H2O/LiI mole ratio is around 2.57 under ambient laboratory conditions (ALCs); however, this ratio linearly increases to 4.00 and then to 5.85 at 40 and 75% humidities, respectively, without affecting the two-dimensional (2D) hexagonal structure of the mesophase. The ionic conductivity of the gel electrolyte linearly increases accordingly, by 2.2 (4.8 × 10-5 to 10.6 × 10-5) and 13.1 times (63.0 × 10-5 S/cm) from ALC to 40 and ALC to 75% humidity, respectively. Increasing water in the gel phase improves the conductivity of the LLC mesophase and the short-circuit current (Isc) of the DSSC, but negatively influences the open-circuit voltage (Voc) of the cell, equilibrium reaction between the LiI and I2, and the anchoring of the dye molecules over the titania surface.