Using first-principles density functional theory (DFT), we study the problem of water incorporation in iron bearing wadsleyite ((Mg,Fe)2SiO4) at transition zone pressures and temperatures under varying conditions of vacancy and ferric ion concentration. Our calculations suggest that about 30% of the Fe3+ may be found at Si tetrahedral site, which is in accordance with the experimental report of Bolfan-Casanova et al. [2012]. Considering first-principles optimized crystal structures of hydrous Fe bearing wadsleyite, we calculate their elastic properties, such as bulk and shear moduli, compressional and shear wave velocity, as a function of pressure and temperature. Our calculations find that pressure suppresses the P and S wave ‘velocity-reduction’ that is caused by hydration. However, the suppression is not significant. So it is very unlikely that the pressure suppression will severely affect the accuracy of seismic waves in detecting the water content of the mantle transition zone as recently proposed [Buchen et al., 2018]. Comparison of our theoretical results with the existing seismic data indicates that the water content of the transition zone decreases with increasing depth, with the region close to the 410 km discontinuity being saturated in water, corroborating the previously proposed theories on mantle convection [Bercovici and Karato, 2003].