Density functional theory simulations are used to investigate the reaction mechanism of oxidation of the bare Si(100)-(2x1) surface by molecular oxygen. O-2 adsorbs molecularly on the "up" surface Si atom with no activation barrier and an adsorption energy of 35 kcal/mol. Adsorbed O-2 is found to be negatively charged. O-2(a) then transforms into the peroxide bridge structure with a barrier of 10 kcal/mol and exothermicity of 33 kcal/mol. The bridged peroxide O-2 then dissociates by first inserting one oxygen atom into the Si-Si dimer bond followed by insertion of the remaining oxygen atom into a Si-Si backbond. The activation barriers are 36 kcal/mol and 13 kcal/mol for the first and second oxygen insertions, respectively. We have also calculated the activation barriers for SiO2 film decomposition, which becomes prevalent at high temperatures, in which SiO(g) desorbs from SiO2 films. The SiO desorption barriers are found to be in the range of 65-67 kcal/mol.