A method and device for processing a liquid with cavitation uses a channel element with passageways having local constrictions and a moving rotor surrounding the channel element. The rotor contains a plurality of rotor channels that are moved during rotation to periodically line up with the passageways in the channel element. To operate the device, liquid is passed through the local constriction in the passageway into an outlet channel at a velocity of at least 1.4 m/s at the exit of the outlet channel to form cavitation bubbles. Cavitation bubbles in the liquid in the outlet channel are collapsed by subjecting the cavitation bubbles to a water hammer hydraulic pulse pressure resulting from periodically rapidly closing of the outlet channel by rotation of the rotor.