Models of Fe-zeolites have been used to study the dissociation of N2O, with and without the presence of ammonia. From Density Functional Theory calculations, the mechanism and energetics of N2O decomposition paths are presented and discussed. The influence of ammonia is analyzed. The results obtained for a single metal ion and for models including a zeolite cluster are compared. The approximate activation barrier calculated with this cluster model is in good agreement with experiment. The presence of two ammonia ligands reduces the calculated activation barrier, leading to the conclusion that ammonia plays a role in both steps of the N2O decomposition, i.e., the breaking of the ON2 bond and the reduction of the iron-oxo compounds.