The present work aims to elucidate the mechanism of the oxidation reaction of lithium atoms with nitrous oxide based on the complete-active-space-self-consistent-field plus second-order perturbation theory (CASSCF-MP2(11e/12o)) ab initio calculations. The title reaction is found to occur via two lower-lying channels with the energy barriers of 4.5 and 6.0 kcal/mol. Both barriers originate as a result of an avoided crossing of the two lowest (2)A' potential energy surfaces (PES), corresponding to the neutral and ionic reactant states. Due to a large energy separation between surfaces in the transition regions, the reaction likely occurs on the lowest adiabatic PES. Earlier photoelectron spectroscopic experiments related to the ionization of LiO are also discussed within the present model. (C) 2002 Published by Elsevier Science B.V.