We investigate the electron ionization of clusters generated in mixed Ar-water expansions. The electron energy dependent ion yields reveal the neutral cluster composition and structure: water clusters fully covered with the Ar solvation shell are formed under certain expansion conditions. The argon atoms shield the embedded (H2O)n clusters resulting in the ionization threshold above ≈15 eV for all fragments. The argon atoms also mediate more complex reactions in the clusters: e.g., the charge transfer between Ar(+) and water occurs above the threshold; at higher electron energies above ~28 eV, an excitonic transfer process between Ar(+)* and water opens leading to new products Ar(n)H(+) and (H2O)(n)H(+). On the other hand, the excitonic transfer from the neutral Ar* state at lower energies is not observed although this resonant process was demonstrated previously in a photoionization experiment. Doubly charged fragments (H2O)(n)H2(2+) and (H2O)(n)(2+) ions are observed and Intermolecular Coulomb decay (ICD) processes are invoked to explain their thresholds. The Coulomb explosion of the doubly charged cluster formed within the ICD process is prevented by the stabilization effect of the argon solvent.