Hydroxyl radicals are important reactive oxygen species produced in the aquatic environment under sunlight irradiation. Many organic pollutants may be decomposed as they encounter hydroxyl radicals, due to their high oxidative ability. 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. A detailed investigation of the possible mechanism for NTO decomposition in water induced by hydroxyl radical as one of the pathways for NTO environmental degradation was performed by computational study at the PCM/M06-2X/6-311++G(d,p) level. Decomposition of NTO was found to be a multistep process that may begin with an addition of hydroxyl radical to the carbon atom of C═N double bond and consequent release of a nitrite radical. The formed intermediate undergoes a series of chemical transformations that include the attachments of hydroxyl radical to carbon atoms, the transfer of hydrogen to hydroxyl radical, isomerization, and bond cleavage, leading to low-weight inorganic compounds, such as ammonia, nitrogen gas, nitrous acid, nitric acid, and carbon(IV) oxide. The anionic form of NTO is more reactive toward interaction with the hydroxyl radical as compared with its neutral form. Calculated activation energies and high exergonicity of the studied process support the significant contribution of the hydroxyl radical to NTO mineralization in environment.