Hardening of lime-based binders is a process where carbonation of portlandite plays an important role. Additionally, carbonation of hydrated lime is of general technical interest, e.g., for carbon dioxide capture. The mechanisms responsible for this reaction are not well-known. In this work, we study the carbonation of portlandite without water and with one water molecule at atomistic scale. Density functional theory (DFT) is used to simulate the reaction path and to accurately calculate minima and transition states on the potential-energy surface. We find that water significantly lowers reaction barriers and stabilizes the partially carbonated reaction product, which gives atomistic proof to experimental results. From our atomistic point of view, we explain the reasons for this effect of water on the carbonation of portlandite.