The Collaborative International Dictionary of English v.0.48:

make water \make water\, v. i.
   1. (Naut.) To leak.
      [1913 Webster]

   2. To urinate; -- a euphemism.
      [1913 Webster]

WordNet (r) 3.0 (2006):

make water
    v 1: eliminate urine; "Again, the cat had made on the expensive
         rug" [syn: make, urinate, piddle, puddle,
         micturate, piss, pee, pee-pee, make water,
         relieve oneself, take a leak, spend a penny, wee,
         wee-wee, pass water]