The addition of water to sulfur trioxide in liquid water has been studied using the ab initio molecular dynamics (MD) method. The hydration reaction observed in the MD simulation is spontaneous and, within a few hundred femtoseconds, yields a contact ion pair consisting of a hydrogen sulfate anion and a hydronium cation. The reaction mechanism is concerted : sulfur-oxygen bond formation and deprotonation of the hydrating water occur simultaneously. The reaction in solution is compared to two gas-phase additions, namely, the bare reaction with only the two reactants present and the reaction catalyzed by an additional water molecule. Both of these reactions lead to neutral products and require substantial amounts of activation energy. The gas-phase results have also been used to evaluate the accuracy of the BLYP (Becke-Lee-Yang-Parr) functional, which has been used in the ab initio MD to determine the density functional electronic structure. Whereas the calculated geometries of the sulfur trioxide-water complexes SO3 . H2O and of the reaction product H2SO4 are in good agreement with experiment, the formation energies are significantly underestimated, in particular for H2SO4.