We have performed a number of quantum chemical simulations to examine water cluster catalyzed decomposition of formic acid. The decomposition of formic acid consists of two competing pathways, dehydration, and decarboxylation. We use the Gaussian 4 method of the Gaussian09 software to locate and optimize a transition state of the decomposition reaction and obtain the activation energy. The decomposition starts by transferring a proton of a formic acid to,a water molecule. The de Broglie wavelength of a proton is similar to the width of the potential barrier of the decomposition reaction at low temperature. The tunneling, in which a proton penetrates the potential barrier, enhances the decomposition rate. Water molecules serve as the catalyst in the decomposition and reduce the activation energy. The relay of a proton from a water molecule to a neighboring water molecule is accomplished with little change of the geometry of a molecule, resulting in the reduction of the activation energy. Two water molecules are actively involved in the decomposition reaction to reduce the activation energy. We have also examined the effect of water clusters with three, four, and five water molecules on the decomposition reaction. The noncovalent distance between a hydrogen atom of a water molecule and an oxygen atom of a neighboring water molecule decreases in a water cluster due to the cooperative many-body interactions. A water molecule in a water cluster becomes a better proton donor as well as a better proton acceptor. The activation energy of the decomposition is further decreased by the catalytic effect of a water cluster. We calculate the reaction rate using the transition state theory corrected by the tunneling effect of a proton. The calculated reaction rate of the decarboxylation is smaller than that of the dehydration when less than three water molecules are included in the simulation. However, the major product of the decomposition of a formic acid becomes carbon dioxide and hydrogen molecule formed by the decarboxylation when a water cluster with more than four water molecules serves as catalyst in the decomposition of formic acid.