Density functional theory (DFT) calculations were employed to study epoxidation of ethylene on a [Ag14O9] cluster model representing silver oxide (001) surface. Theoretical results obtained in this study showed that formation paths of acetaldehyde and vinyl alcohol have higher activation barriers than that of ethylene oxide formation path on silver oxide (35 and 35 vs. 20 kcal/mol). Formation of the ethylene oxometallocycle intermediate is found to have a low probability on Ag2O(001) surface. The essential reason for this may be lower basicity of surface oxygen atom on silver oxide surface and the absence of a surface vacancy position to activate ethylene. Adsorbed EO is formed on Ag2O surface cluster without an activation barrier. The activation barriers of the rate-limiting steps for the production of EO mechanisms (via ethyleneoxy and non-activated paths, 20 vs. 14 kcal/mol) are in relatively good agreement with the experimental activation energy values (14, 17 and 22 kcal/mol) reported for EO formation on silver catalyst.