A laser flash photolysis technique and quasi-classical trajectory (QCT) calculations have been used to determine the rate coefficients for the title process. The experimental high-pressure-limiting rate coefficient is 7.0 x 10(-11) cm(3) s(-1) at T= 300 K, which compares with the computed QCT value for the Mg+ + H2O capture rate of 2.75 +/- 0.08 x 10(-9) cm(3) s(-1) at the same temperature. The 39-fold difference between the experimental and simulation results is explained by further QCT calculations for the He + Mg+ center dot H2O* collision process. In particular, our simulation results indicate that collision-induced dissociation (CID) of the Mg+ center dot H2O* excited adduct is very likely compared with collisional stabilization (CS), which is an order of magnitude less likely. Including the relative rates of CID and CS in the calculation and assuming that those Mg+ center dot H2O* complexes that perform only one inner turning point in the dissociation coordinate are unlikely to be stabilized by CS, the computed rate coefficient compares well with the high-pressure experimental value.