Nitrous oxide (N2O) is a by-product of exhaust pipe gases treatment produced by motor vehicles. Therefore, the N2O reduction to N2 is necessary to meet the actual environmental legislation. The N2O adsorption and dissociation assisted by the square-based pyramidal Rh5 cluster was investigated using the density functional theory and the zero-order regular approximation (ZORA). The Rh5 sextet ground state is the most active in N2O dissociation, though the quartet and octet states are also active because they are degenerate. The Rh5 cluster spontaneously activates the N2─O cleavage, and the reaction is highly exothermic ca. -75 kcal mol(-1). The N2─O breaking is obtained for the geometrical arrangement that maximizes the overlap and electron transfers between the N2O and Rh5 frontier orbitals. The Rh5 high activity is due to the Rh 3d orbitals are located between the N2O HOMO and LUMO orbitals, which makes possible the interactions between them. In particular, the O 2p states strongly interact with Rh 3d orbitals, which finally weaken the N2─O bond. The electron transfer is from the Rh5 HOMO orbital to the N2O antibonding orbital.