The effects of aqueous solvation on the thermochernistry of reactions between mercury and small halogen molecules has been investigated by the microsolvation approach using ab initio and density functional theory (DFT) calculations. The structures, vibrational frequencies, and binding energies of 1, 2, and 3 water molecules with mercury-halide (HgBr2, HgBrCl, HgCl2, HgBr, and HgCl) and related mercury and halogen species (Br-2, BrCl, Cl-2, Cl, Hg, and Br) have been computed with second order Moller-Plesset perturbation theory (MP2) and the B3LYP density functional method. Accurate incremental water binding energies have been obtained at the complete basis set (CBS) limit using sequences of correlation consistent basis sets, including higher order correlation effects estimated from coupled cluster calculations. The resulting energetics were used to calculate the influence of water molecules on the thermochernistry of a number of reactions between mercury and small halogen-containing molecules. In general, the presence of water favors the formation of oxidized mercury halide species.