Molybdenum disulfide (MoS2) is a lamellar solid lubricant often used in aerospace applications because of its extremely low friction coefficient (∼0.01) in inert environments. The lubrication performance of MoS2 is significantly impaired by exposure to even small amounts of water and oxygen, and the mechanisms behind this remain poorly understood. We use density functional theory calculations to study the binding of water on MoS2 sheets with and without defects. In general, we find that pristine MoS2 is slightly hydrophilic but that defects greatly increase the binding affinity for water. Intercalated water disrupts the crystal structure of bulk MoS2 due to the limited space between lamellae (∼3.4 Å), and this leads to generally unfavorable adsorption, except in the cases where water molecules are located on the sites of sulfur vacancies. We also find that water adsorption is more favorable directly below a surface layer of MoS2 compared to in the bulk.