Using x-ray emission and photoemission spectroscopies to measure the occupied valence levels in a thin crystalline ice film, we resolve the ionization-induced dissociation of water in ice on a femtosecond time scale. Isotope substitution confirms proton transfer during the core-hole lifetime in spite of the nonresonant excitation. Through ab initio molecular dynamics on the core-ionized state, the dissociation and spectrum evolution are followed at femtosecond intervals. The theoretical simulations confirm the experimental analysis and allow for a detailed study of the dissociative reaction path.