The mechanism of ethylene epoxidation on Ag surfaces has been investigated using the density functional method and Ag n clusters (n = 3 to 10) modeling the Ag(111) surface. The adsorption energy of O2 to the Ag clusters was strongly dependent on the HOMO level of the cluster, and the clusters with higher HOMO levels afforded larger O2 adsorption energies. The energetics was investigated for both the molecular and atomic oxygen epoxidation mechanisms. For the atomic oxygen mechanism, epoxidation was found to proceed without an activation energy, whereas a small amount of activation energy (about 5 kcal/mol) was calculated for the molecular oxygen mechanism.