Consider a piston–cylinder device containing liquid water at 20°C and 1 atm pressure (state 1, Fig. 3–6). Under these conditions, water exists in the liquid phase, and it is called a compressed liquid, or a sub cooled liquid, meaning that it is not about to vaporize. Heat is now transferred to the water until its temperature rises to, say, 40°C. As the temperature rises, the liquid water expands slightly, and so its specific volume increases. To accommodate this expansion, the piston moves up slightly. The pressure in the cylinder remains constant at 1 atm during this process since it depends on the outside barometric pressure and the weight of the piston, both of which are constant. Water is still a compressed liquid at this state since it has not started to vaporize.
As more heat is transferred, the temperature keeps rising until it reaches 100°C (state 2, Fig. 3–7). At this point water is still a liquid, but any heat addition will cause some of the liquid to vaporize. That is, a phase-change process from liquid to vapor is about to take place. A liquid that is about to vaporize is called a saturated liquid. Therefore, state 2 is a saturated liquid state.
Reference: Thermodynamics – An Engineering Approach 5th Edition by: Yunus A. Cengel and Michale A. Boles