High-level ab initio calculations have been performed on the neutral Cd .H2O complex, and the dication, Cd2+.H2O. Effective core potentials (ECPs) are employed for cadmium, augmented with a large, flexible polarization space, which also includes diffuse functions. The calculated double ionization energy for Cd is within 0.03 eV of the experimental value, suggesting that the basis set is able to describe both Cd and Cd2+ well. For both complexes, three main structures were considered: C-2 nu with the cadmium atom interacting with the oxygen atom of H2O; C-2 nu with the cadmium atom interacting with both hydrogens of H2O; and planar CS where the cadmium interacts with only one of the hydrogen atoms of H2O. The global minimum for Cd .H2O is found to be the trans CS structure, whereas for Cd2+.H2O, the charge-dipole interaction leads to the CU geometry, with the cadmium interacting with the oxygen atom of H2O being the lowest in energy. Our best values for the binding energies, De, are: Cd .H2O, 134 cm(-1) (0.4 kcal mol(-1)); Cd2+.H2O, 78 kcal mol(-1), employing the CCSD(T) method. We conclude that the Cd2+.H2O complex is stable with respect to charge transfer and should be observable; after correction for zero-point vibrational energy, the stability of Cd .H2O is less certain from the results of the calculations.