Perovskite solar cells (PSCs) have attracted great attention in the scientific community in the past few years. Their many advantages including suitable bandgaps, simple fabrication procedures and outstanding charge-transport properties have propelled PSCs as the promising next-generation photovoltaic systems. However, one key problem faced by PSCs is their short lifetimes that has severely limited their potential for commercialization. The photo-active hybrid inorganic-organic perovskite materials in PSCs were found to degrade rapidly in the air under ambient working conditions. Microscopic understanding of the degradation processes is crucial for the development of more robust perovskite materials. However, such understanding has been limited. In this talk, we discuss the ab initio density-functional study of the degradation reactions of perovskites in the presence of oxygen, water vapor and other reactive molecular species generated from photochemical reactions in the air. We identify the possible degradation mechanisms and examine the different factors affecting the degradation processes. This understanding will provide important guide for rational design of robust perovskite materials for photovoltaic applications.