Copper is the only elemental metal that reduces a significant fraction of CO2 to hydrocarbons and alcohols, but the atomistic reaction mechanism that controls the product distributions is not known because it has not been possible to detect the reaction intermediates on the electrode surface experimentally, or to carry out Quantum Mechanics (QM) calculations with a realistic description of the electrolyte (water). Here, we carry out QM calculations with an explicit description of water on the Cu(100) surface (experimentally shown to be stable under CO2 reduction reaction conditions) to examine the initial reaction pathways to form CO and formate (HCOO-) from CO2 through free energy calculations at 298 K and pH 7. We find that CO formation proceeds from physisorbed CO2 to chemisorbed CO2 (*CO2 delta-), with a free energy barrier of Delta G(double dagger) = 0.43 eV, the rate-determining step (RDS). The subsequent barriers of protonating *CO2 delta- to form COOH* and then dissociating COOH* to form *CO are 0.37 and 0.30 eV, respectively. HCOO- formation proceeds through a very different pathway in which physisorbed CO2 reacts directly with a surface H* (along with electron transfer), leading to Delta G(double dagger) = 0.80 eV. Thus, the competition between CO formation and HCOO- formation occurs in the first electron-transfer step. On Cu(100), the RDS for CO formation is lower, making CO the predominant product. Thus, to alter the product distribution, we need to control this first step of CO2 binding, which might involve controlling pH, alloying, or changing the structure at the nanoscale.