Heptafluoroisobutyronitrile (C4) has been utilized as a dielectric compound to replace sulfur hexafluoride for the sake of environmental concern. Energetic profiles of the potential energy surface for the unimolecular reaction of C4 were calculated using density functional theory (M06-2X), quadratic complete basis set (CBS-QB3), Gaussian-4, multireference Rayleigh-Schrodinger perturbation theory (RS2, RS2C), and state-averaged multiconfiguration self-consistent-field (SA-MCSCF) ab initio methods. Among 38 production channels, the most energetically accessible reaction path is the three-centered rearrangement of cyanide to isocyanide. The C-CF3 bond appears to be the weakest bond in C4(X1A') and the symmetry-breaking C-CF3 bond cleavage undergoes to form the ground-state CF3(X2A1) and CF3CFCN (X2A″) radicals. All the possible isomerization pathways involving F- and CF3-migration together with the concerted elimination and stepwise decomposition routes were revealed for C4 and i-C4. Various isomers and potential toxic byproducts including FCN, CF3CN, C2F5CN, CF2═CFCF3, CF2═CFCN, CF4, C2F6, and alkyne compounds have been identified for the first time. Master equation analysis has been carried out to obtain the temperature- and pressure-dependent thermal rate constants. Theoretical kinetics for the loss of C4 due to pyrolysis is in good agreement with the temperature-ramped flow-tube experiment. The present theoretical work provides new insights on the thermal stability and chemical reactivity of C4. Moreover, i-C4 and C2F6 are proposed to be the potential characteristic gas molecules to monitor the insulation breakdown of C4 in the electric equipment.