A detailed study including ab initio calculations and classic Monte-Carlo simulations of hydroxylamine in the gas and liquid phases is presented. A classical interaction potential for hydroxylamine, which includes polarizability, many-body effects, and intramolecular relaxation, was constructed. The results of the simulation were compared to the available experimental data in order to validate the model. We conclude that liquid hydroxylamine has a multitude of hydrogen bonds leading to a large density where the existence of cis conformers and clusters of these conformers is possible. This explains the occurrence of the classical [R. Nast and I. Z. Foppl, Z. Anorg. Allg. Chem. 263, 310 (1950)] scheme for the molecule's decomposition at room temperature and its large exothermicity and instability.