The date at which the Earth's hydrosphere came into existence is unknown. Although all current geological models for the very early Precambrian predict or suppose a hydrosphere1-4, there are difficulties in reconciling this with geological and astronomical theories of planetary formation. Furthermore the effect of a substantial hydrosphere on the Precambrian climatic environment is difficult to determine. Recent developments make it possible to synthesize a picture of this environment during the 700 Myr preceding the deposition of the oldest known sediments5. We attempt such a synthesis here, drawing together work on the dynamics of accretion from the proto-planetary nebula 6,7 and of planetary differentiation7, on the role of volatiles in impact cratering8-10, and on the composition 11-22, isotope systematics23-25 and radiation climatology26-29 of the early hydrosphere. We can reconcile these diverse contributions if the hydrosphere - The inventory of excess volatiles1 - Is allowed to differentiate during accretion, with most of the H2O and CO2 going rapidly into oceans and sediments. Both gradual outgassing30 and a massive CO2 atmosphere2 are unlikely, and a reduced mantle beneath a neutral hydrosphere is not paradoxical1,3,17. Results from both a one-dimensional radiative-convective (1D RC) model and a general circulation model suggest that self-regulating mechanisms are important in the climate of this early hydrosphere.