We present a high-level quantum chemical study of possible reaction mechanisms associated with the catalytic decomposition of urea by a bioinorganic mimetic of the dinickel active site of urease. We chose the phthalazine-dinickel complexes of Lippard and co-workers, because these mimetics have been shown to hydrolytically degrade urea. High-level quantum chemical methodologies were utilized to identify stable intermediates and transition-state structures along several possible reaction pathways. The computed results were then used to further analyze what may occur in the active site of urease. Valuable information on the latter has been extracted from experimental data, computational approaches, and unpublished molecular dynamics simulations. On the basis of these comparative studies, we propose that both the elimination and hydrolytic pathways may compete for urea decomposition in the active site of urease.