In order to obtain a deep insight into the N 2 O formation mechanism in a fluidized bed, density functional theory was used to investigate the interaction between char(N) and NO at a molecular level. Three key influencing factors for the formation of N 2 O, namely, active sites, nitrogen status, and oxygen molecules, were taken into study. The geometric structures, electron distribution characteristics, and reaction paths were optimized and calculated. The outer orbital electron properties of char(N) and NO indicate that NO acts as an oxidizer, which tends to abstract electrons from char(N) during the char(N)−NO interaction. A stable N 2 O molecule has a singlet state and presents as a linear molecular structure. The chemisorption on the char surface will weaken the bond energy of NO from 620 to 94.1 kJ/mole, which promotes the catalytic reduction of NO. Active sites on the char surface benefit the reduction of NO to N 2 , rather than N 2 O, which indicates that excessive high temperatures will inhibit the production of N 2 O. The combination of pyridine nitrogen and NO to form N 2 O needs to overcome a much higher energy barrier of 357.4 kJ/mole. The initial chemisorption of oxygen molecules on the char surface will promote the formation of N 2 O by lowering the dissociation energy of N 2 O from the char surface as well as exposing nitrogen to the char surface.