NTO (5-nitro-1,2,4-triazol-3-one), an energetic material used in military applications, may be released to the environment and dissolved in surface water and groundwater due to its good water solubility. Singlet oxygen is an important reactive oxygen species produced in the aquatic environment under sunlight irradiation. A detailed investigation of the possible mechanism for NTO decomposition in water induced by singlet oxygen as one of the pathways for NTO environmental degradation was performed by a computational study at PCM(Pauling)/M06-2X/6-311++G(d,p) level. Decomposition of NTO was found to be a multistep process that may begin with singlet oxygen attachment to the carbon atom of the C═N double bond. The formed intermediate undergoes cycle opening, and nitrogen gas, nitrous acid, and carbon (IV) oxide elimination. Isocyanic acid, arisen transiently, hydrolyzes into ammonia and carbon (IV) oxide. The obtained results show a significant increase in reactivity of the anionic form of NTO as compared to its neutral form. The calculated activation energies and high exothermicity of the studied processes support the contribution of singlet oxygen to NTO degradation into low-weight inorganic compounds in the environment.