The initial decomposition process of urea nitrate (UN) was studied by using ab initio calculations. To determine the most favorable reaction pathway of decomposition, geometries, structures, and energies were evaluated for reactants, products, intermediates, and transition states of the proposed pathways at the HF/6-31++G(2d,p), MP2/6-31++G(2d,p), and the B3LYP/6-31++G(2d,p) levels. It has been found that there is a reaction path for the endothermic channel with a potential energy barrier of 47.8 kcal/mol at the MP2/6-31++G(2d,p) level. Although a considerable difference was found between the actual crystal structure and the optimized structure of UN, these results strongly suggest that the decomposition occurs via internal hydrogen transfer from one amino group to the other -NH2 to produce NH3. This study has revealed a series of the UN reaction paths through one intermediate and two transition states with the evolutions of the initial gaseous species, NH3, HNCO, and HNO3, in that order. These calculated results seem to support the experimental results observed at the thermal decomposition of UN by using T-jump/FT-IR spectroscopy.