Herschel-HIFI observations of water in the low-mass star-forming object L1448-MM, known for its prominent outflow, are presented, as obtained within the `Water in star-forming regions with Herschel (WISH) key programme. Six H2-16O lines are targeted and detected (E_up/k_B ~ 50-250 K), as is CO J= 10-9 (E_up/k_B ~ 305 K), and tentatively H2-18O 110-101 at 548 GHz. All lines show strong emission in the bullets at |v| > 50 km/s from the source velocity, in addition to a broad, central component and narrow absorption. The bullets are seen much more prominently in H$_2$O than in CO with respect to the central component, and show little variation with excitation in H2O profile shape. Excitation conditions in the bullets derived from CO lines imply a temperature >150 K and density >10^5 cm^-3, similar to that of the broad component. The H2O/CO abundance ratio is similar in the bullets and the broad component, ~ 0.05-1.0, in spite of their different origins in the molecular jet and the interaction between the outflow and the envelope. The high H2O abundance indicates that the bullets are H2 rich. The H2O cooling in the bullets and the broad component is similar and higher than the CO cooling in the same components. These data illustrate the power of Herschel-HIFI to disentangle different dynamical components in low-mass star-forming objects and determine their excitation and chemical conditions.