The insulation characteristics and decomposition components of C4F7N/N-2 gas mixture, a potential substitute for SF6, were first explored by breakdown experiments/gas chromatography-mass spectrometer. The structural properties of C4F7N molecule and the decomposition mechanism of C4F7N/N-2 gas mixture were analyzed based on the density functional theory calculation and ReaxFF molecular dynamics simulation. We found that C4F7N/N-2 mixture has great self-recovery performance. The decomposition of C4F7N in a discharge mainly produces CF, C2F6, C3F8, CF3CN, C2F4, C3F6, and C2F5CN, among which the relative content of C2F6, CF, and CF3CN is higher. ReaxFF-MD simulations show that CF3, CN, F, and C3F7 are the four main free radicals produced by C4F7N. The decomposition characteristics of N-2 are better than that of C4F7N. The addition of N-2 has a certain buffering effect to avoid the massive decomposition of C4F7N. The global warming potential value of a gas mixture containing 20% C4F7N decreased by 94.32% compared with SF6. Relevant results not only reveal the decomposition characteristics of C4F7N/N-2 mixture in a discharge comprehensively, but also provide a reference for engineering application and emission of a C4F7N/N-2 gas mixture.