Polycyclic aromatic hydrocarbons (PAHs) may comprise up to 20% of the carbon budget in our galaxy and most PAHs condense onto water-rich icy grain mantles. Benzene-water clusters have been invoked as model systems for studying the photo-processing of water ice mantles containing PAHs. However, there is a paucity of information on larger aromatics, where the extended π cloud could affect photo-processing. In this study, tunable vacuum ultraviolet (VUV) photoionization of naphthalene-water clusters Nx(H2O)y (N denotes naphthalene) is performed using synchrotron radiation and analyzed by reflectron time-of-flight mass spectrometry. Naphthalene clusters up to x = 4 are generated as are naphthalene-water clusters up to y = 25. At low photon energy (<11 eV), the naphthalene moiety is ionized and there is no proton transfer from N+ to the water sub-cluster, which is very different from the benzene-water system. Protonated products, N[(H2O)xH]+ and OH radical addition product (NOH)[(H2O)xH]+ are generated above 11 eV, suggesting that water sub-clusters dominate the dynamics at high photon energies. Ab initio calculations are performed to decipher the experimental results. Energetics of the neutral structures N(H2O)1-4 and their photoionized counterparts are calculated, including ionization on the N moiety as well as on the water sub-cluster. Energy decomposition analysis (EDA) is performed to understand trends in the binding between the naphthalene and the water sub-cluster in the ionized species.