The reaction of atomic nickel with water in the gas phase has been investigated by kinetic studies under static pressure conditions near room temperature, and by accurate quantum chemical calculations. Experimental and theoretical results are consistent with a reaction mechanism involving formation of a weakly bound nickel-water adduct, which may react further by oxidative addition of nickel to the 0-H bond of water to form the insertion product HNiOH. Experimental estimates of reaction energetics have been made by using unimolecular reaction theory calculations to model rate coefficients obtained by fitting kinetic data to a simple rate equations model. These experimental estimates are in agreement with the theoretical results, and indicate that the insertion product is bound by at least 20-25 kcal/mol, relative to nickel plus water. There is also agreement that the barrier to oxidative addition is no greater than 1-2 kcal/mol, and may be smaller. This theoretical result was obtained only at the highest level treatments in the geometry optimization. The reaction mechanism involves a spin-orbit induced surface crossing from the ground state triplet surface of the reactants to a singlet surface, followed by a second crossing back to the triplet surface in the product region. The oxidative addition reaction thus proceeds on a singlet potential surface which correlates with excited (d9s1)1D nickel atoms. The electronic configuration of the 1D state is favorable for oxidative addition because repulsion between nickel and water may be reduced by sd hybridization. The presence of the low lying 1D state is responsible for the unique reactivity of nickel, among the late first row transition metal atoms, with respect to the oxidative addition reaction with water.