B3LYP and CCSD(T) calculations with various basis sets have been performed to investigate the potential energy surface for the ScO + H-2 --> Sc + H2O reaction, which is shown to proceed by formation of the HScOH molecule. HScOH can isomerize to the molecular Sc-OH2 complex and dissociate to Sc atoms and water with endothermicity of 51-59 kcal/mol. The HScOH molecule is thermodynamically stable and the barrier required to release H-2, similar to 28 kcal/ mel, is much lower than the energy needed for the Sc + H2O dissociation. The Sc-OH2 molecular complex has a binding energy of 7-11 kcal/mol and is stabilized kinetically with respect to isomerization to HScOH by a significant barrier.