The new compound WTe2I was prepared by a reaction of WTe2 with iodine in a fused silica ampule at temperatures between 40 and 200 °C. Iodine atoms are intercalated into the van der Waals gap between tungsten ditelluride layers. As a result, the WTe2 layer separation is significantly increased. Iodine atoms form planar layers between each tungsten ditelluride layer. Due to oxidation by iodine the semimetallic nature of WTe2 is changed, as shown by comparative band structure calculations for WTe2 and WTe2I based on density functional theory. The calculated phonon band structure of WTe2I indicates the presence of phonon instabilities related to charge density waves, leading to an observed incommensurate modulation of the iodine position within the layers.