The DFT molecular modeling of N2O decomposition over cobalt spinel (1 0 0) plane was performed using a cluster approach, and applied to rationalize the experimental reactivity data. The energetics of the postulated elementary steps such as N2O adsorption, N2O activation through dissociative electron or oxygen atom transfer, surface diffusion of resultant oxygen intermediates, and their recombination into O2, was evaluated and discussed. The geometry and electronic structure of the implicated active sites and intermediates were determined. Three different transition states were found for the activation of nitrous oxide molecule. In the preferred electron transfer mechanism, involving a monodentate transition state, the N2O activation and the formation of dioxygen are energetically the most demanding steps, whereas the barrier for the oxygen surface diffusion was found to be distinctly smaller. For the oxygen atom transfer the reaction is energetically constraint by the NO bond-breaking step. The inhibiting effect of co-adsorbed water and oxygen on the particular reaction steps was briefly addressed.