First-principle density functional theory calculations were used to investigate the electronic structure and mechanism of the LiH + NH3 -> LiNH2 + H-2 reaction. Along the reaction pathway, intermediate complexes HLi center dot center dot center dot NH3 and LiNH2 center dot center dot center dot H-2 and a transition state can be found. The N-2p electron in the highest occupied molecular orbital (HOMO) of NH3 transfers to the Li-2s orbital in lowest unoccupied molecular orbital (LUMO) of LiH and forms the initial state HLi center dot center dot center dot NH3. In the transition state, H1 of LiH and H2 of NH3 turn toward each other, resulting in the formation of a H-2 bond. From the transition state to the final state, the geometric configuration changes from C-s to C-2v, and the improvement of geometric configuration symmetry results in a decrease in the energy gap between HOMO and LUMO. The LiH + NH3 -> LiNH2 + H-2 reaction is exothermic. Copyright (C) 2012, Hydrogen Energy Publications, LLC. Published by Elsevier Ltd. All rights reserved.