We applied density-functional theory (DFT) in periodic system to investigate the two reactions (CO + Fe2O3/MgO -> CO2 + Fe2O2/MgO, O-2 + Fe2O2/MgO -> O + Fe2O3/MgO) in chemical looping combustion system. While Fe2O3 was supported on MgO(1 0 0) surface Fe2O3 gathered together to form a cluster shape on MgO(1 0 0), denoted as Fe2O3/MgO, where the Fe2O3 was activated by MgO(1 0 0). Then CO interacted with Fe2O3/MgO and carbonate generated during a stepwise reaction with the calculated maximum barrier energy of 0.95 eV, far less than that of the reaction between CO and the pure Fe2O3 cluster (2.59 eV). CO was oxidized by Fe2O3/MgO and then Fe2O3/MgO transformed into the reduced state Fe2O2/MgO, corresponding to the reaction in the fuel reactor in the CLC system. Then the breaking of the adsorbed O-2 molecule on Fe2O2/MgO made an O atom bind to a Fe site with the barrier energy of 0. 20 eV, which played as the key step for the oxidizing of Fe2O2/MgO by O-2 into Fe2O3/MgO, corresponding to the reaction in the air reactor in the CLC system. (c) 2012 Elsevier B.V. All rights reserved.