Wet workshop is the idea of using a spent rocket stage as a makeshift space station. A liquid-fuel rocket primarily consists of two large, airtight fuel tanks; it was realized that the fuel tanks could be retrofitted into the living quarters of a space station. A large rocket stage would reach a low Earth orbit and undergo later modification. This would make for a cost-effective reuse of hardware that would otherwise have no further purpose, but the in-orbit modification of the rocket stage could prove difficult and expensive.
A wet workshop is contrasted with a "dry workshop", where the empty upper stage is internally outfitted on the ground before launch with a human habitat and other equipment. It is not filled with fuel, instead the stage is launched into orbit by a sufficiently powerful rocket.
Wernher von Braun proposed a wet workshop concept for launch on the Saturn V. His design modified the S-II second stage of the Saturn V stack to allow it to be used as living space once reaching orbit. Since the S-IC lower stage of the Saturn V cannot reach orbit on its own, the S-II would have to fire, and then vent out any remaining fuel once it reached orbit. To allow this, the floors of the station would be made of an open grid which allowed the fuel to pass through easily to the piping at the bottom of the tanks. The structure also presented convenient hand and footholds.
Since the entire fuel load would be needed to reach orbit, additional life support equipment could not be stored inside the S-II during launch. von Braun's design placed all of this ancillary equipment in a large cylindrical carrier, which would be carried on top of the S-II stage in place of the S-IVB normally placed there. After reaching orbit and venting, a large access hatch in the top of the S-II's hydrogen tank would be opened. The cylindrical cargo module would then be inserted hydraulically into the tank through this opening, sealed, and then the tank would be repressurized to form a large living space. Power would be provided by solar cells lining the outside of the S-II.
During the 1960s, as the Apollo mission transitioned from development to launch, a number of groups inside NASA were studying the post-Apollo era. Many ideas for continuing use of the existing Saturn hardware were proposed, and some of these were collected under the name "Apollo X", which became the Apollo Applications Program (AAP). By the time AAP started to receive funding, the Saturn V lines were planned to shut down after producing just enough Saturn V's for the Moon missions alone. However, during the same period of time, on-orbit testing of the Apollo systems was proceeding much better than expected, and a number of proposed shake-down missions were no longer required. This left a small number of Saturn IB launchers available for use.