The dramatic accident involving ammonium nitrate (AN) that took place at Toulouse in September 2001 has once again focused attention on the hazards pertaining to chemical incompatibility in an industrial environment. To complete the experimental results, a detailed theoretical study was performed to better understand the involved mechanisms, considering the reaction between ammonium nitrate and the sodium salt of dichloroisocyanuric acid (SDIC). Starting from theoretical results obtained for the pure reactants, the gas-phase decomposition mechanism of the mixture was investigated and fully characterized by means of density functional theory (DFT) calculations. Beyond the complete characterization, in terms of intermediate structures and energies, of the decomposition pathways, the results evidenced the role of water in catalyzing the decomposition reaction, through a significant decrease of the activation energy of the rate-determining step. These results, in qualitative agreement with the calorimetric experiments, pointed out the instability of the ANSDIC wet mixture and the underpinning incompatibility mechanism between these two chemicals.