Various ab initio methods have been applied to the studies of the molecular structure and energetics for the low-lying electronic states of the phenoxy radical and of the mechanism of its thermal decomposition. The calculations confirm the decomposition mechanism I (Scheme 1) suggested earlier from experimental consideration. It involves the formation of the bicyclic intermediate E2 followed by alpha-CC bond cleavage to produce E3 and the elimination of the CO group from the latter leading to the main reaction products, C5H5 + CO. The rate-determining step is E2 --> E3 with transition stale T2. The activation energy, 52 kcal/mol, at our best G2M(rcc,MP2) level, is 8 kcal/mol higher than the value derived from experiment. A multistep RRKM calculation has been performed for the decomposition reaction. The theoretical rate constants agree well with the experimental results at lower temperatures (T < 1200 K) but deviate rom experiment above 1300 K. Plausible reasons fur the deviation have been discussed. On the basis of state-specific and state-averaged CASSCF calculations, the observed electronic transitions for the phenoxy radical have been assigned.