The geometry and the potential curve of thermal decomposition for 2, 2 dimethyl-5, 5-azotetraol (2-DMAT) are calculated by ab initio quantum chemistry method. The structuralcharacteristics and decomposition mechanism are carefully studied. It is found that the terrazzo ring satisfies 4n + 2 rule and it is a conjugated π-systems for 2-DMAT. The azotetrazol has aromaic characteristic and its thermal decomposition can proceed in two steps: ring opening and N2 separation. The activation energies of the two steps are 152.3 kJ/mol and 44.67 kJ/mol respectively. The ring opening is the rate-controlling step.