We have recently intensively studied the dissociation of individual water molecules on ultrathin MgO film grown on Ag(100) substrate at the single-molecule level, by means of both scanning tunneling microscopy experiment and density functional theory calculations. We have found clear evidence for that the chemical reactivity of ultrathin MgO film can be controlled by the film thickness, in which the interfacial interaction between oxide and metal substrate plays an important role in determining chemical reactivity. In this short review, we briefly discuss the role of the ultrathin insulating film in water dissociation induced by vibrationally excited state using inelastic tunneling electrons, which is crucial to selectively achieve two kinds of dissociation path, as well as underlying thickness dependence of chemical reactivity.