Cationic water clusters containing iodine, of the composition I(H2O)(n)(+), n = 0-25, are generated in a laser vaporization source and investigated by FT-ICR mass spectrometry. An investigation of blackbody radiation-induced fragmentation of size-selected clusters I(H2O)(n)(+), n = 3-15, under collision-free conditions revealed an overall linear increase of the unimolecular rate constant with cluster size, similar to what has been observed previously for other hydrated ions. Above a certain critical size, I(H2O)(n)(+), n greater than or similar to 13, reacts with HCl by formation of the interhalide ICI and a protonated water cluster, which is the reverse of a known solution-phase reaction. Accompanying density functional calculations illustrate the conceptual differences between cationic and anionic iodine-water clusters I(H2O)(n)(+/-). While I-(H2O)(n) is genuinely a hydrated iodide ion, the cationic closed-shell species I(H2O)(n)(+) may be best viewed as a protonated water cluster, in which one water molecule is replaced by hypoiodous acid. In the strongly acidic environment, HOI is protonated because of its high proton affinity. However, similar to the well-known H3O+/H5O2+ controversy in protonated water clusters, a smooth transition between H2IO+ and H4IO2+ as core ions is observed for different cluster sizes.