The decomposition mechanism of ammonium nitrate in the gas phase was investigated and fully characterized by means of CBS-QB3 calculations. Five reaction channels were identified, leading to the formation of products (N2, H2O, O2, OH, HNO, NO3) found in the experimental works. The identified mechanism well underlines the origin of the chemical hazard of ammonium nitrate which is related to the exothermicity of the lowest decomposition channels. Furthermore, the high barrier to overcome in the rate determining step well explained the fact that the reaction is not usually spontaneous and requires a significant external stimulus for its onset. An accurate DFT benchmark study was then conducted to determine the most suitable exchange-correlation functional to accurately describe the reaction profile both in terms of structures and thermochemistry. This evaluation supports the use of the M06-2X functional as the best option for the study of ammonium nitrate decomposition and related reactions. Indeed, this level of theory provided the lowest deviations with respect to CBS-QB3 reference values, outperforming functionals especially developed for reaction kinetics.