Reported here are results of theoretical calculations on Fe(H2O)(6)(3+), Fe(H2O)(5)(OH)(2+), three isomers of Fe(H2O)(4)(OH)(2)(+), and Fe(H2O)(3)(OH)(2)(+), which investigate the molecular mechanisms of hydrolysis of ferric ion in water. The combination of density functional electronic structure techniques and a dielectric continuum model for electrostatic solvation applied to the Fe(H2O)(6)(3+) complex yields an estimate of -1020 kcal/mol (experimental values -1037 to -1019 kcal/mol) for the absolute free energy of the aqueous ferric ion. The predicted free energy change for the first hydrolysis reaction is surprisingly close to the experimental value (2 kcal/mol predicted compared to 3 kcal/mol experimental). For the second hydrolysis reaction, we found an unexpected low-energy isomer of Fe(H2O)(4)(OH)(2)(+) with five ligands in the inner sphere and one water outside. The hexacoordinate cis and trans isomers are, respectively, slightly lower and higher in energy. Calculations on the pentacoordinate species Fe(H2O)(3)(OH)(2)(+) suggest that extrusion of the outer-sphere water is nearly thermoneutral. The reaction free energy for the second hydrolysis is predicted in the range 16-18 kcal/mol, higher than the experimental value of 5 kcal/mol. Because the theoretical predictions are higher than experimental values, and novel structures were encountered among products of the second hydrolysis, we argue that conformational entropy is an important omission in this theoretical treatment of net reaction free energies. A fuller cataloging of low-energy hydrolysis products and direct calculations of partition functions of the isolated complexes should help in modeling equilibrium speciation in groundwaters.