Density functional theory calculations of the substitution and insertion of chlorides on hydroxylated NiO(111) surfaces have been performed to simulate the penetration mechanism of initiation of localized corrosion of passivated metal surfaces. The substitution of surface hydroxyls by Cl- is found to be endothermic with the substitution energy increasing with Cl- coverage. The insertion of one Cl- in the first oxide layers is also endothermic but with the insertion energy decreasing with Cl- coverage. These results evidence the role of the repulsive electrostatic interactions between adsorbed chloride ions for increasing coverage; further substitutions are disfavored by these interactions while the insertion becomes more favorable. (C) 2003 The Electrochemical Society.