The mechanism of formation of triplet (PNP)RhO and (PNP)Rh(N-2) (PNP = N((SiMe2CH2PBu2)-Bu-t)(2)) from reaction of two molecules of (PNP)Rh with N2O has been studied by DFT, evaluating mechanisms which (1) involve free N-2, and (2) which effect N/O bond scission in linearly coordinated (PNP)RhNNO. This work shows the variety of modes of binding N2O to this reducing unsaturated metal fragment and also evaluates why a mechanism avoiding free N-2 is preferred. Comparisons are made to isoelectronic CO2 in its reaction with (PNP)Rh.