The electronic structure of vanadium pentoxide, V2O5, is discussed based upon the cluster quantum chemical calculations. Satisfactory convergence in cluster properties is achieved for the cluster of 10 vanadium atoms. No influence of the second layer on the surface properties is found. The results of the adsorption of hydrogen, treated as a probe reaction to model the first step in the selective oxidation of hydrocarbons at the structurally different oxygen sites, are compared with the adsorption/activation of the propene and toluene molecules at the vanadium pentoxide (0 10) surface. Among the different oxygen centers the oxygens bridging two bare vanadium atoms are most negatively charged. Hydrogen binds to all inequivalent oxygen sites with the strongest binding occurring for oxygen bridging two bare vanadium atoms. The calculations for propene and toluene adsorption/reaction on V2O5 (0 1 0) show that the oxidation into the aldehyde species proceeds through the binding of the carbon into the bridging oxygen, abstraction of two hydrogens from the same carbon atom of methyl group and formation of two hydroxyl groups at the surface. The potential usage of quantum chemical approaches in the description of electronic properties of a catalyst surface and in understanding the mechanism of catalytic reactions (in particular the determination of the reaction pathways) is discussed. It is shown how modern quantum chemical methods can address questions which are relevant in surface science and catalysis.