MgO hydration is an expansive process. It is used in cement to compensate for shrinkage, but it can be harmful at higher concentrations. In this quantum-chemical study, the first steps of the hydration of MgO have been explored. The semiempirical MO method MSINDO with the cyclic cluster model, in- cluding long-range electrostatic interactions, has been applied to investigate water adsorption on the (001) surface of MgO. Both molecular adsorption and dissociative adsorption have been found to occur. The latter is stabilized by hydrogen bonding from neighbouring water molecules and surface oxygen. Several energy minima exist for the experimentally low temperature p(3×2) monolayer H2O observed on the MgO (001) surface which consists of a mixture of dissociated and molecular water. One third of the water molecules were dissociated, which is consistent with previous DFT studies. A stable fully hydroxy- lated MgO (001) surface with OH bridging two Mg ions and the hydrogen bound to the surface oxygen was discovered. This structure appears to promote the expansive, topotactic nucleation of brucite on the MgO (001) surface.