AbstractMechanism of the decomposition reaction between N2O and H2 molecules on the Cu7 cluster was studied using density functional theory (DFT) with the BP86 functional in combination with the Aug‐cc‐pVDZ basis sets for N, O and H atoms, and the cc‐pVDZ‐PP basis set for Cu atom. The results show that the reaction undergoes via two successive steps. The first step involves adsorption of N2O on the Cu7 surface, followed by the decomposition of N2O with an energy barrier of barely ~3 kcal/mol, producing an O atom, which subsequently binds to the cluster and a N2 molecule. In the second step, the adsorped O atom couples with the H2 molecule bound to a different Cu atom of the cluster leading to a release of H2O molecule via two different pathways. The pathway corresponding to an adsorption of a N2O molecule onto the most positively charged site of Cu7 as turns out that the most energetically favorable with an energy barrier of ~22 kcal/mol, which is much lower than the barrier of 42 kcal/mol for the reaction without a catalyst.