The reaction of formaldehyde with ammonia to generate NH2CH2OH, an amino acid precursor, is studied at the CCSD(T)/631]+G**//B3LYP/6-311+G** and CCSD(T)/6-311+G**//MP2/6-311+G** levels. The addition of one, two, and three water molecules is studied. Regardless. the reaction mechanism always consists of a nucleophilic attack of the carbon by the lone pair oil the nitrogen accompanied by the simultaneous transfer of a proton to the formaldehyde oxygen. With water present, this proton transfer occurs via a chain of proton transfers. For one, and then two, water molecules, the activation energy is lowered. Addition of a third water molecule does not lower it further. (c) 2005 Elsevier B.V. All rights reserved.