The reaction of lithium amide with methane was studied with ab initio calculations, and the electron density function was analyzed using the theory of atoms in molecules. The transition state for the reaction is a highly ionic species that can be modeled approximately as an ionic aggregate. The nature and evolution of the bonds were monitored throughout the reaction and related to the accompanying changes in the behavior of the charge density at the bond critical points and in the properties of the individual atoms. The contributions of each atom to the energies of reaction and activation were determined. The HF/6-31G* level of theory was tested by an MCSCF calculation of the transition state and shown to perform adequately in the description of the reaction. The effect of solvation was studied by the addition of molecule of ammonia.