The ionization and fragmentation of small water clusters induced by electron impact (80 eV) is investigated. Using a multiparticle coincidence spectrometer (reaction microscope), all three charged final state particles—two outgoing electrons and one fragment ion—are detected. Nonprotonated (H2⁢O)+ 2 and protonated water clusters H3⁢O+, [H2⁢O]2⁢H+, [H2⁢O]4⁢H+, and [H2⁢O]5⁢H+ are identified in the measured ion spectrum. The ionization channels for formation of these species are investigated by measuring the kinetic energy distributions and the electronic states of the ions. Only a single state can lead to (H2⁢O)+ 2, which is identified as ionization of water dimer with a 1⁢b1 hole at the hydrogen bonding donor molecule, while for the protonated water species three major electronic states corresponding to the ionization of 1⁢b1, 3⁢a1, and 1⁢b2 type orbitals are observed.