Microsolvation offers a bottom-up approach to investigate details of how solute-solvent interactions affect chemical reaction dynamics. The dynamics of the microsolvated SN2 reaction F-(H2O) + CH3I are uncovered in detail by using direct chemical dynamics simulations. Direct rebound and stripping and indirect atomic-level mechanisms are observed. The indirect events comprise 70% of the solvated reaction and occur predominantly via a hydrogen-bonded F-(H2O)···HCH2I prereaction complex. The reaction dynamics show propensity for the direct three-body dissociation channel F-(H2O) + CH3I CH3F + I- + H2O after passing the reaction's dynamical bottleneck. The water molecule leaves the reactive system before traversing the postreaction region of the PES, where water transfer toward the product species occurs. This provides an insight into the very interesting finding of strongly suppressed formation of energetically favored solvated products for almost all SN2 reactions under microsolvation.