Density Functional Theory-based calculations have been employed to investigate the structure, stability and dynamics of iron sulphide clusters, FexSy (x, y ≤ 4), in water. Car-Parrinello molecular dynamics simulations of the building unit FeS in explicit water show that the iron is only four-coordinated, which indicates that the effect of sulphur is to significantly reduce the coordination shell of iron compared with the typical octahedral arrangement of hexa-aqua iron complexes in water. The molecular dynamics simulations of FexSy particles (x, y ≥ 2) in explicit water reveal that these clusters are highly unstable as they dissociate after a few picoseconds. The Gibbs free energies to form the FeS and Fe2S2 species have been evaluated in a simulated aqueous environment, using the mPW1B95 density functional theory level for the gas-phase component and the UAHF-CPCM solvation model for the hydration contribution, and the results indicate that while FeS is thermodynamically stable in aqueous solution, the formation of a Fe2S2 cluster is endergonic, and dissociation is preferred under natural water conditions.