The decarboxylation of benzisoxazole-3-carboxylate has been investigated in detail by ab initio molecular orbital calculations. The effects of solvent on transition state geometries have been investigated by inclusion of one or two water molecules in the ab initio calculations. The decarboxylation and ring opening steps are found to be concerted. Kinetic isotope effects have been calculated for the carboxylate-C-13-labeled compound for various transition state geometries. Satisfactory agreement has been found between the experimental values for the reaction in water and ab initio HF/6-31G* calculated values for systems including four hydrogen bonds to the carboxylate group. The variations in free energies of solvation along the reaction path in five different solvents (water, methanol, chloroform, acetonitrile, tetrahydrofuran) have been calculated with Monte-Carlo free energy perturbation calculations. Solvent effects are generally overestimated, but the experimental trends have been reproduced for four of the five solvents, The effects of ion pairing have been tested by inclusion of a tetramethylguanidinium cation into the Monte-Carlo simulations for acetonitrile and tetrahydrofuran. With inclusion of ion pairing, the relative rates of THF and acetonitrile are reproduced much better, but solvent effects are underestimated relative to the reaction in water.