Phosphate hydrolysis by GTPases plays an important role as a molecular switch in signal transduction and as an initiator of many other biological processes. Despite the centrality of this ubiquitous reaction, the mechanism is still poorly understood. As a first step to understand the mechanisms of this process, the nonenzymatic hydrolysis of mono-phosphate and tri-phosphate esters were systematically studied in gas phase and aqueous solution using hybrid density functional methods. The dielectric effect of the environment on the energetics of these processes was also explored. Theoretical results show that for mono-phosphate ester, the dissociative pathway is much more favorable than the associative pathway. However, the reaction barriers for the dissociative and associative pathways of tri-phosphate hydrolysis are very close in aqueous solution, though the dissociative pathway is more favorable in the gas phase. High dielectric solvents, such as water, significantly lower the activation barrier of the associative pathway due to the greater solvation energy of the associative transition states than that of the reactant complex. By contrast, the barrier of the dissociative pathway, with respect to the gas phase, is less sensitive to the surrounding dielectric. In the associative hydrolysis pathway of the tri-phosphate ester, negative charge is transferred from the gamma-phosphate to beta-phosphate through the bridging ester oxygen and results in P-gamma-O bond dissociation. No analogous charge transfer was observed in the dissociative pathway, where P-gamma-O bond dissociation resulted from proton transfer from the gamma-phosphate to the bridge oxygen. Finally, the active participation of local water molecules can significantly lower the activation energy of the dissociative pathway for both mono-phosphate and tri-phosphate.