To simulate the properties of ultrathin layers of magnesium oxide epitaxially grown on silver (001), we have adopted a periodic slab model, consisting of six layers of Ag covered on both sides with an MgO monolayer, All calculations, have been performed with the CRYSTAL98 program. Several DFT functionals were tried and a rich basis set was adopted. The electronic and structural properties of the two bulk materials (Ag and MgO) were quite accurately reproduced, The presence of the metallic substrate was found to have an appreciable influence on the structural and electronic features of the oxide surface, In the most stable configuration (O ions directly above Ag atoms, Mg ions in the hollow sites). the surface is corrugated, and there is a net transfer of electrons from the overlayer to the metal, leading to a substantial reduction of the work function of the metal and to a decrease of the electrostatic field at the surface. The reactivity properties of the supported oxide surface have been investigated by studying the interaction of the composite material with water molecules.