Ab initio molecular orbital method and Monte Carlo (MC) simulation with free energy perturbation (FEP) techniques have been used to study the aza-Wittig reaction of iminophosphoranes (H3P=NH) with formaldehyde (H2CO) in the gas phase and in three different solvents: water, methanol, and tetrahydrofuran (THF). The optimized structures and thermodynamic properties of stationary points for the title reaction system in the gas phase were calculated at the MP2/6-31G** level of theory. The effects of substituents on the reactivity of iminophosphorane were discussed. This aza-Wittig reaction is more favorable for X=H and CH3 than for X=C1 in the gas phase. The potential energy profiles along the minimum energy path in the gas phase and in three solvents were obtained. The solvent effects on the H3P=NH + H2CO reaction increase in the order water approximate to methanol > THF, suggesting that the protic polar solvents are more suitable for the aza-Wittig reaction.