Microstructural defects are introduced in materials upon irradiation with energetic particles. These defects can cause degradation of mechanical properties and contribute to material failure. Transmuted helium in irradiated stainless steels exerts deleterious effects on material properties. We have performed kinetic Monte Carlo (kMC) simulations of point defect diffusion and clustering in bcc alpha iron. The model includes helium and vacancy diffusion and spontaneous clustering and dissociation of the point defects from the clusters. We employ the kMC simulations to investigate the time evolution of the point defect configuration leading to defect clustering and bubble formation. The concentration of embryonic point defect clusters is determined as a function of the simulation time.