We present ab initio studies of the hydration effects on the reaction profile of the S(N)2 Cl- + CH3Cl reaction using our recently proposed generalized conductor-like screening model (GCOSMO) within the quantum mechanical and classical frameworks including both electrostatic and nonelectrostatic contributions to the hydration free energy. For the quantum mechanical approach, we employed the Hartree-Fock (HF), second-order Moller-Plesset perturbation theory (MP2), and hybrid nonlocal density functional theory (DFT) with the 6-31+G(d,p) basis set. Using the GCOSMO model, we found that the calculated free energy reaction profile of the title S(N)2 reaction in aqueous solution is in good agreement with experimental observations and previous studies. The solvent reaction field was found to have a noticeable effect on the solute electronic density distribution. The DFT free energies of hydration agree very well with MP2 results and are in better agreement with experimental data than HF results. The DFT-GCOSMO approach provides a promising tool for studies of mechanisms of chemical and biochemical reactions in solutions.