The formation of water by hydrogenation of atomic oxygen is studied using density functional theory. Atomic oxygen preferentially adsorbs at the four-fold hollow site, the hydroxyl group prefers the bridge site in a tilted configuration, and water is most stable when adsorbed at the top site with the two O-H bonds parallel to the Fe surface. Water formation by the hydrogenation of oxygen is a highly activated process on the Fe(100) surface, with similar activation energies, in the order of 1.1 eV, for the first and second hydrogen additions. A more favourable route for the addition of the second hydrogen atom involves the disproportionation of hydroxyl groups to form water and adsorbed oxygen. Dissociation of the OH is also likely since the activation energy is similar to that for disproportionation of 0.65 eV. Furthermore, the results show that the dissociation of water on Fe(100) is a non-activated process: 0.16 eV for the zero-coverage limit and 0.03 eV when surface oxygen is present. Herein, adsorption energies, structures and vibrational frequencies are presented for several adsorption states at 0.25 ML coverage, as well as the potential energy surface for water formation on Fe(100).