Density functional theory (DFT) calculations were carried out in a study of the mechanism of direct oxidation of methanol to formaldehyde by N2O over an extra-framework species in ZSM-5 zeolite represented by a [(SiH3)(4)AIO(4)(Fe) or (FeO)] cluster models. The major difference between these two sites is that in the case of the [Fa](1+) site, a reaction is present that leads to the formation of the thermodynamically highly stable grafted OH and methoxy (OCH3) species. Moreover, the vibrational frequencies for grafted species on the surface match well with the experimental values. The theoretical calculations achieved in this study obviously show that [Fe-O](1+) site in Fe-ZSM-5 catalyst has a significant role on the catalytic oxidation of methanol to formaldehyde by N2O. (C) 2011 Elsevier Inc. All rights reserved.