Study Of intra- and intermolecular hydrogen-bonding interaction and excited state proton transfer reaction has been carried Out in 4-hydroxyacridine (4-HA) and its hydrated clusters theoretically. Density functional theory [B3LYP/6-311++G(d,p)] has been exploited to calculate structural parameters and relative energies of different conformers of 4-HA and its hydrates. The substantial impact of solvent reaction field on hydrogen-bond energies, conformational equilibrium, and tautomerization reaction in aqueous medium have been realized by employing Onsager and PCM reaction field methods, and the stability of the conformers of 4-HA is found to be profusely modulated by the electrostatic influence of the solvent. A deeper insight into the nature of H-bonding in 4-HA and its hydrated clusters has been achieved under the provision of natural bond orbital and atoms in molecule analysis. Elucidation of potential energy curves for proton transfer reaction reveals that an intrinsic and two-water-molecule-assisted proton transfer (PT) reaction in 4-HA is hindered by high energy barrier in the S, surface, whereas single-water-assisted PT reaction is practically rendered barrierless. At the same time, the appreciably high barrier height of the ground state potential energy curve in all the cases unambiguously rules Out the possibility of ground state proton transfer reaction.