Thermal decomposition of methyl azide has been studied computationally by using the complete active space self-consistent field (CASSCF) method and Moller-Plesset theory using the CASSCF wave function as the zeroth-order wave function (CAS/MP2). The calculations have been performed in conjunction with the 6-31G* basis set. The reaction is predicted to occur in two steps via nitrene intermediate: (1) CH3N3-->CH3N+N-2; (2a) CH3N-->H-2+HCN, (2b) CH3N-->H2CNH. The rate-limiting step is the N-2 extrusion (1), being a competitive mechanism between a spin-forbidden path and a spin-allowed one. The calculated energy barrier height for both processes is found to be isoenergetic, Delta E=41 kcal/mol, where Delta E represents the difference between the energy at the minimum on the singlet state surface of methyl azide and the energy at the minimum energy crossing structure (ISC1) or the singlet transition state (TS1) for the spin-forbidden path and the spin-allowed one, respectively. The nitrene intermediate formed in step (1) can undergo two parallel reactions: (2a) decomposition in H-2 and HCN, and (2b) isomerization to methyleneimine. H-2 extrusion from the imine generated in step (2b) has been studied as well. Two high energy transition states have been found for 1,1-H-2 and 1,2-H-2 elimination from methyleneimine, respectively.