Yb2Si2O7 is a popular environmental barrier coating; however, it decomposes into Yb2SiO5 in high-temperature steam environments. The thermal mismatch between Yb2Si2O7 and Yb2SiO5 leads to the cracking and failure of the disilicate coating via oxidation. Dispersing SiC nanofillers into the Yb2Si2O7 matrix is suggested to maintain the Yb2Si2O7 matrix and promote crack self-healing. This study is aimed at clarifying the effect of water vapor on the self-healing ability of such composites. X-ray diffraction analysis and scanning electron microscopy were used to monitor the surface composition and the crack formation, respectively, in 10 vol% SiC-dispersed Yb2Si2O7 composites. Annealing at temperatures higher than 750 °C in air or in a water vapor rich atmosphere led to strength recovery and the self-healing of indentation-induced surface cracks owing to volume expansion during the oxidation of SiC. The self-healing effect was influenced by the oxidation time and temperature. Rapid diffusion of H2O as an oxidizer into the SiO2 layer promoted self-healing in a water vapor rich atmosphere. However, accelerated oxidation at temperatures higher than 1150 °C formed bubbles on the surface. Fabricating composites with a small amount of Yb2SiO5 will be a solution to these problems.