Inspired by the high volumetric energy density and biocompatibility of Ag2O, an exploration of the sodiation mechanism with one and two Na atom(s) per Ag2O unit cell has been carried out. Here, Na adsorbed at tetrahedral interstitial site (TIS) of Ag2O emerges to be the most stable with energy of –6.98 eV leading to the formation of Na–Ag2O compound. The advancement of Ag2O towards a metallic state is evidenced by the absence of a forbidden energy gap in the band structure plot with Na inclusion. Also, the formed compound is confirmed from PDOS plots and by analysing the charges transferred between Na, Ag, and O atoms from CDDP. Further, when the concentration of Na is stepped up to two, the most stable TIS and Agsub sites exhibits an energy of –5.79 eV/Na atom. In this case, the Bader charge analysis reveals that Na prefers to form strong contacts with Ag and weak interactions with O, thus demonstrating the feasibility of alloying rather than the conversion product. Subsequently, NEB studies show that the surface diffusion of Na from one TIS to the adjacent unit requires a minimal activation energy thereby suggesting the suitability of Ag2O as an alloying host.