Density functional theory (DFT) calculations are employed to study N2O decomposition on relaxed [(SiH3)(4)AlO4M] (where M = Fe, Co) cluster models representing Fe- and Co-ZSM-5 surfaces and Fe-ZSM-5 channel cluster. The catalytic cycle steps are completed both for Fe- and Co-ZSM-5 clusters. It is found that the general trend of the results obtained is in agreement with experimental and theoretical literature: Co-ZSM-5 has a lower activation energy barrier than Fe-ZSM-5 and O-2 desorption step is the rate-limiting step for both clusters. The activation barrier for the decomposition of the first N2O molecule inside a Fe-ZSM-5 channel cluster increases in comparison with that of the cluster model indicating a channel effect on the activation barrier. The activation barrier reported for the channel cluster is 12.63 kcal/mol. This is also in good agreement with experimental literature. (C) 2007 Elsevier B.V. All rights reserved.