Direct dynamics simulations, with B97-1/ECP/d theory, were performed to study the role of microsolvation for the OH-(H2O) + CH3I reaction. The SN2 reaction dominates at all reactant collision energies, but at higher collision energies proton transfer to form CH2I-, and to a lesser extent CH2I- (H2O), becomes important. The SN2 reaction occurs by direct rebound and stripping mechanisms, and 28 different indirect atomistic mechanisms, with the latter dominating. Important components of the indirect mechanisms are the roundabout and formation of SN2 and proton transfer pre-reaction complexes and intermediates, including [CH3-I-OH]-. In contrast, for the unsolvated OH- + CH3I SN2 reaction, there are only seven indirect atomistic mechanisms and the direct mechanisms dominate. Overall, the simulation results for the OH-(H2O) + CH3I SN2 reaction are in good agreement with experiment with respect to reaction rate constant, product branching ratio, etc. Differences between simulation and experiment are present for the SN2 velocity scattering angle at high collision energies and the proton transfer probability at low collision energies. Equilibrium solvation by the H2O molecule is unimportant. The SN2 reaction is dominated by events in which H2O leaves the reactive system as CH3OH is formed or before CH3OH formation. Formation of solvated products is unimportant and participation of the (H2O)CH3OH-I- post-reaction complex for the SN2 reaction is negligible.