Density functional B3L-YP/6-311+G(3df,2p)HB3LYP/6-31G** calculations show that strong eta(1)- and eta(2)-coordinated complexes, HScOH-N-2 ((2)A') and N2Sc(H)OH ((2)A"), bound 28.1 and 31.0 kcal/mol, respectively, can be formed in the ScO/N-2/H-2 system. The calculations reveal interesting interplay between the H-2 and N-2 ligands, as an addition of H-2 increases the reactivity of ScO with respect to N-2 and vice versa. ScO is demonstrated to enhance the reaction of nitrogen hydrogenation through the ScO ((2)Sigma(+)) + N-2 + H-2 --> TS2 --> N2ScO ((2)A") + H-2 --> N2ScO-H-2 ((2)A") --> TS3 --> N2Sc(H)OH ((2)A") --> TS5 --> NN(H)ScOH TS6 --> N2H2ScO ((2)A') mechanism. (C) 2003 Elsevier Science B.V. All rights reserved.