Aqueous amines are currently the most promising solution for large-scale CO2 capture from industrial sources. However, molecular design and optimization of amine-based solvents have proceeded slowly due to a lack of understanding of the underlying reaction mechanisms. Unique and unexpected reaction mechanisms involved in CO2 absorption into aqueous hydrazine are identified using 1H, 13C, and 15N NMR spectroscopy combined with first-principles quantum-mechanical simulations. We find production of both hydrazine mono-carbamate (NH2-NH-COO-) and hydrazine di-carbamate (-OOC-NH-NH-COO-), with the latter becoming more populated with increasing CO2 loading. Exchange NMR spectroscopy also demonstrates that the reaction products are in dynamic equilibrium under ambient conditions due to CO2 exchange between mono-carbamate and di-carbamate as well as fast proton transfer between un-protonated free hydrazine and mono-carbamate. The exchange rate rises steeply at high CO2 loadings, enhancing CO2 release, which appears to be a unique property of hydrazine in aqueous solution. The underlying mechanisms of these processes are further evaluated using quantum mechanical calculations. We also analyze and discuss reversible precipitation of carbamate and conversion of bicarbonate to carbamates. The comprehensive mechanistic study provides useful guidance for optimal design of amine-based solvents and processes to reduce the cost of carbon capture. Moreover, this work demonstrates the value of a combined experimental and computational approach for exploring the complex reaction dynamics of CO2 in aqueous amines.