Nitriding is a chemical process that corrodes metal surfaces. Understanding the reaction mechanisms presents a considerable challenge both theoretically and experimentally. Using density functional theory (DFT) and a cluster surface model, we have investigated the structures and energetics for NH3 adsorption and decomposition processes at the on-top and 4-fold-hollow sites of the Nb(100) surface. We show that the preferred adsorption mode for NH3 is the on-top site, that NH2 can reside on both modes, and that other decomposition fragments will most likely fail into the hollow site, Comparison of the results calculated by both local DFT and gradient-corrected DFT is made at both adsorption modes, which shows that the local DFT calculations overestimate the binding energies of the nitriding species considerably, although both calculations yield the same trends. It was found that the decomposition process at the on-top site is essentially an energy-uphill process while at the hollow site it is a down-hill process. The theoretical results provide useful physical insight into the nitriding mechanism at transition metal surfaces and will facilitate materials development of nitriding-resisting products.