A series of first-principle calculations were carried out to study the reaction pathways for alkaline hydrolysis of formamide. A hybrid supermolecule-polarizable continuum approach based on a recently developed Fully Polarizable Continuum Model (FPCM) was used to account for solvent effects on the reaction process and free energy barriers in aqueous solution. Four solvent water molecules were explicitly included in the supermolecular reaction coordinate calculations; the remaining solvent water was modeled as a polarizable dielectric continuum surrounding the supermolecular reaction system. The calculations indicate that the alkaline amide hydrolysis consists of two reaction steps, i.e. the formation of the tetrahedral intermediate and the decomposition of the tetrahedral intermediate. Considering hybrid supermolecule in the reaction, the second step involved a water-assisted proton transfer during the decomposition of the tetrahedral intermediate. The direct participation of the solvent water molecule in the proton-transfer process significantly drops the energy barrier for the decomposition of the tetrahedral intermediate. Thus, the free energy barrier calculated for the decomposition of the tetrahedral intermediate through the water-assisted proton transfer becomes lower than the free energy barrier for the formation of the tetrahedral intermediate. The calculations demonstrate the important effect of solvent hydrogen bonding on energy barriers. The favorable pathway involving water-assisted proton transfer and the free energy barriers calculated using the hybrid supermolecule-polarizable continuum approach, including both the hydrogen-bonding effects and the remaining bulk solvent effects, are in good agreement with the available experimental data.