Decomposition of an adsorbed NO molecule is possible provided that it has an empty nearest-neighbor site for the oxygen (or nitrogen) dissociation product. For this reason, the coverage dependence of the rate constant of this step is usually described by the equation k(r)(theta)=(1-theta)k(r)(0) containing the fraction of empty sites. Employing the lattice-gas model, we show that this dependence can be dramatically modified by repulsive lateral adsorbate-adsorbate interactions. If the lateral interaction in the ground state (intact NO molecules) is negligible, the interaction in the activated state may suppress the reaction with increasing coverage. In this case, the decomposition rate constant can often be represented as k(r)(theta)approximate to(1-theta)(n)k(r)(0), where n > 1. This expression is, however, not applicable near saturation coverage. If the lateral interaction in the ground state is non-negligible, the rate constant of NO decomposition first increases with increasing coverage and then rapidly drops as theta --> 1. For relatively strong adsorbate-adsorbate interactions (greater than or equal to 2 kcal/mol), the region where the rate constant decreases with increasing coverage is rather narrow (theta greater than or equal to 0.8).