Calculations are presented for the structures and the reactions of various conformers of the bare alanine, neutral alanine-(H2O)(n), and alanine zwitterion-(H2O)(n) (n = 1 and 2) clusters. The effects of the binding water molecules on the relative thermodynamic stability and the isomerization reaction of alanine are examined. Hydrogen bonding between alanine and the water molecule(s) may significantly affect the thermodynamic stability of conformers of the neutral alanine-(H2O), (n = 1 and 2). clusters. Detailed analysis is presented on the isomerization (proton transfer) pathways between the neutral alanine-(H2O)(2) and the alanine zwitterion(H2O)(2) clusters including the structures of the transition states by carrying out the intrinsic reaction coordinate analysis. We find that at least two water molecules need to bind to produce the stable alanine zwitterion-water cluster in the gas phase. The isomerization reaction for the alanine-(H2O)(2) cluster proceeds by the concerted double proton-transfer mechanism via the binding water molecules. The effects of continuum water are also examined by employing the supramolecule/continuum type model to study the properties of aianine in aqueous solution. The water continuum is predicted to considerably alter the thermodynamic and kinetic stability of the neutral and zwitterioniic alanine-(H2O)(n) (n = 0-2) clusters.