Atmospheric and thermal evolution of the earth growing by planetesimal impacts was modeled by taking into account the blanketing effect of impact-induced H2O atmosphere and the temperature dependence of H2O degassing. When the water content of planetesimals is larger than 0.1% by weight and the accretion time of the earth is less than 5¿107 years, the surface of accreting earth melts and thus a ''magma ocean'' forms and covers the surface. The formation of a ''magma ocean'' will result in the initiation of core-mantle separation and mantle differentiation during accretion. Once a magma ocean is formed, the surface temperature, the degree of melting in the magma ocean, and the mass of the H2O atmosphere are nearly constant as the protoplanet grows further. The final mass of the H2O atmosphere is about 1021kg, a value which is intensitive to variations in the model parameter values such as the accretion time and the water content of planetesimals. That the final mass of H2O atmosphere is close to the mass of the present oceans suggests an impact origin for the earth's hydrosphere. On the other hand, most of the H2O retained in planetesimals will be deposited in the solid earth. Free water within the proto-earth may affect differentiation of the proto-mantle, in particular, the mantle FeO abundance and the incorporation of a light element in the outer core.