We report here the results of an ab initio study of the lithium-hydrogen exchange reaction of CH4 + (CH3Li)(2) both in gas phase and in tetrahydrofuran (THF) solution. All the species involved in the reaction have been characterized at the Hartree-Fock, second-order Moller-Plesset (MP2)(full), and density functional theory (B3LYP) levels using the 6-31G(d,p) basis set. The effect of the solvent (THF) has been modeled using the Polarizable Continuum Model developed by the group in Pisa that includes both electrostatic and nonelectrostatic (cavitation and dispersion repulsion terms) contributions to the solvation energy. A main result of this study is the finding of a nonplanar transition state structure that leads to a barrier similar to 2 kcal/mol lower at the MP2 level than the one calculated based on a C-s six-membered ring transition state previously reported by Schleyer et al. for the same reaction (J. Comput. Chem. 10, 437 (1989)). We include here a detailed discussion of the differences between these two mechanistic alternatives and the effect of the solvent on both of them. The performance of the B3LYP hybrid functional is examined against our MP2 results to assess whether this methodology is reliable for the study of more complex metalation reactions in which the size of the reactant system prevents the use of MP2 methods as a way for including electron correlation.