Interaction of water with iron surface is involved in many significant processes like corrosion and water treatment by zerovalent iron nanoparticles (nZVI). We used a density functional theory to study adsorption and chemical reaction of a single water molecule with two low-index surfaces of iron, Fe(100) and Fe(111). We used generalized gradient form (PW91) of the density functional and also range-separated hybrid functional (HSE06), which incorporates a fraction of the Hartree-Fock exchange. A water molecule adsorbs on both surfaces with oxygen atom pointing on top a Fe atom and has higher affinity to the Fe(111) surface. The adsorbed water molecule can dissociate into H + OH (H-Fe-OH) species attached to the Fe surface with an activation barrier of 15.7 and 13.3 kcal/mol for the (100) and (111) surface, respectively. The hybrid functional yields similar energies for adsorption but predicts higher dissociation barriers compared to the generalized gradient functional. The HSE06 calculation reveals that H-Fe-OH is a deep minimum on the reaction profile of the studied process, in particular on the Fe(111) surface. This indicates that dissociated species can play an important role in reactivity of nZVI with pollutants in water treatment. The HSE06 functional also improves the overall agreement between theoretical calculations and previous experimental studies of the adsorption of water on iron surfaces.