Recently, Nishibayashi et al. reported a dimolybdenum-dinitrogen complex that is catalytic for complete reduction of dinitrogen to ammonia. This catalyst is different from the Schrock molybdenum catalyst in two fundamental aspects: it contains two metal centers, and the oxidation state is Mo-0 instead of Mo-III. We show that a remarkable feature of the bimetallic complex is the bond-mediated delocalized electronic states, resulting from the two metal centers bridged by a dinitrogen ligand. Using first-principles calculations, we found that this property makes the bimetallic complex the effective catalyst, as opposed to the originally postulated monometallic fragment. A favorable reaction pathway is identified, and the nature of the intermediates is examined. Furthermore, studies of the intermediate states led us to propose possible deactivation processes of the catalyst. The finding that the central bimetallic unit (Mo-N-2-Mo) is relevant for catalytic activity may provide a guideline for the development of more efficient dinitrogen-reducing catalysts.