Electronic structure calculations have been performed on a number of models for cobalt substituted aluminophosphates (or CoAPOs) using density functional theory. A number of different cluster models of CoAPOs were constructed and used for the calculations. Our results predict that the high-spin forms of cobalt in tetrahedral coordination are the most stable in agreement with previous electron spin resonance measurements. Also, we find that the structural parameters obtained from geometry optimizations are in good agreement with X-ray absorption experiments (EXAFS). For example, for models of CoAPO compounds with cobalt in the reduced Co(II) oxidation state we calculate the Co-O bond length to be ca. 1.94 Angstrom from cluster calculation as compared to 1.90 Angstrom from EXAFS measurements on reduced CoAPO-18. Our calculations also show the necessity of applying constraints when considering cluster models to correctly represent the local environment around the transition metal, and we have developed a method using atomistic shell-model calculations to obtain reasonable constraints for this purpose. We have calculated the thermochemistry of a likely initiation step for partial oxidation with a number of substrates. It is found that the reaction is more favorable when an additional ligand, H2O or hydroxyl, is introduced into the cobalt coordination sphere forming a five-coordinate local geometry, and that also considerable stabilization of the resulting alkyl radical can be achieved by the formation of a metal-carbon bond. Additionally, it can be noted that although for reproduction of EXAFS data for four-coordinated cobalt models, smaller cluster are sufficient, when considering the energetics of five-coordinated cobalt species, larger cluster are needed to avoid the formation of unrealistic fragment products. We have also investigated the interaction of small molecules (O-2 and CH3CN) with the cobalt center. Whereas we find no evidence for a stable intermediate involving direct coordination of molecular oxygen, our results with acetonitrile show good agreement with previous EXAFS measurements on CoAPO-5/CH3CN.