We present a potential energy surface for the microhydrated SN2 reaction of a chloride ion with methyl chloride in the presence of one or two water molecules. All degrees of freedom are included. We analyze the stationary points corresponding to reactant, ion-dipole complex, and transition state for the monohydrated and the dihydrated reactions, and we use generalized transition-state theory to evaluate the rate constants for these reactions. A noteworthy feature of the dynamics calculations is that vibrational zero point effects are included, as are effects of quantization on vibrational heat capacities and entropies, and water molecules are treated as nonrigid. We find that the rate constant at 300 K decreases from the gas-phase value of 3.5 X 10-14 cm3 molecule-1 s-1 to a value of 1.1 X 10-17 cm-173 molecule-17-1 s--1 for the monohydrated reaction and to a value of 3.7 X 10-20 cm-3 molecule--1 s--1 for the dihydrated reaction. We have also evaluated the rate constant for the monohydrated reaction under the equilibrium solvation approximation. The extent of nonequilibrium solvation is tested by comparing calculations in which the water molecule degrees of freedom participate in the reaction coordinate to those in which they do not. Two different methods for defining the generalized transition-state theory dividing surface under the equilibrium solvation approximation lead to quite different values for the equilibrium solvation rate constant, and we determine which equilibrium solvation approximation is more appropriate by using variational transition-state theory.