The formation of gold-thiolate nanoparticles via oxidation of gold clusters by thiols is examined in this work. Using the BP86 density functional with a triple zeta basis set, the adsorption of methylthiol onto various gold clusters Au-n(Z) (n = 1-8, 12, 13, 20; Z = 0, -1, +1) and Au-38(4+) is investigated. The rate-limiting step for the reaction of one thiol with the gold cluster is the dissociation of the thiol proton; the resulting hydrogen atom can move around the gold cluster relatively freely. The addition of a second thiol can lead to H-2 formation and the generation of a gold-thiolate staple motif.