Layered metal halides like BiI3 are of current interest in connection with both 2D materials and photovoltaics. Here, we present a facile new method for the preparation of millimeter-sized BiI3 single crystals. We use these crystals to study the surface reactivity of their (001) cleavage planes toward various environmental conditions by measuring morphological changes using atomic force microscopy and analyzing the formed species by means of X-ray photoelectron spectroscopy and X-ray diffraction methods. We find that freshly cleaved samples show atomically flat surface regions extending over several micrometers and reveal steps corresponding to single BiI3 layers. However, we also find that the surface deteriorates in air on a time scale of hours. By studying samples cleaved and stored under different conditions, we identify water as the agent initiating the changes in surface morphology, while under inert gas and dry oxygen, the surface stays intact. On the basis of the analysis of deteriorated long-term-stored samples we identify BiOI as the main product of hydrolysis. We also observe a second long-term decomposition route for samples stored under dynamic vacuum, where formation of BiI whiskers occurs. Overall, our findings emphasize the challenges associated with the surface reactivity of BiI3 but also demonstrate that well-ordered BiI3 surfaces can be obtained, which indicates that preparation of extended, atomically smooth BiI3 monolayers by exfoliation from bulk crystals should be possible.