Photoexcitation of I-(H2O)(n) clusters can lead to charge transfer states with the excess electron localized on the water cluster, making these ideal systems for studying electron/water cluster dynamics. In the present study, the MP2 method is used to study the structure and infrared spectrum of the ground state of I-(H2O)(4) and the CASPT2 method is used to characterize the low-lying electronically excited states of the complex. The calculated IR spectrum is in good agreement with experimental results, providing support for a crown-like structure of I-(H2O)(4). The 2(I)A excited state is predicted to be 29 meV below the ground state of the neutral cluster (at the geometry of the ground-state anion), and the vertical excitation energy for the 1(1)A --> 2(1)A charge-transfer transition is calculated to be 4.60 eV, in good agreement with the experimental value of 4.5 eV. Potential energy curves for the relaxation of the photoexcited I-(H2O)(4) cluster from the crown-like to the planar structure are presented.