The microscopic reaction mechanisms for the water adsorption/dissociation and hydrogen generation processes on the alpha-Al2O3(0001) surface are clarified by using spin-polarized density functional theory with the projected augmented wave approach. The adsorptions of OH, O, and H species are also examined. Calculations show that the H2O, OH, O, and H species prefer to adsorb at the Al(II)-top, Ala, II)-top, Ala, II)-bridge, and Al(II)-top sites with adsorption energies of -1.34, -5.91, -8.22, and -3.14 eV on the Al-terminated surface, whereas those are Al-top, Al-top, Al-top, and O-top sites with adsorption energies of -1.11, -2.79, -2.00, and -2.23 eV for the Al, O-terminated surface. Geometries of the molecular adsorbed intermediates, transition states, and the hydroxylated products as well as the energetic reaction routes are fully elucidated. Hydrogen generation and full dissociation of water are found to occur on the Al-terminated surface with overall exothermicities of 2.37 and 4.22 eV, whereas only the production of coadsorbed H-(ads) + OH(ads) is observed on the Al, O-terminated surface with an overall exothermicity of 1.06-1.64 eV. In addition, the local density of states and Bader charge calculations are carried out to study the interaction between the adsorbate and surface along the reaction.