The mechanism responsible for the oscillating behavior in N2O decomposition of rhodium particles supported on zirconia-based oxides in the presence of oxygen and water is studied using transient reactivity and thermogravimetric tests. The behavior over different oxide supports is also reported. The results demonstrate that (i) the atomic oxygen produced in the decomposition of N2O remains chemisorbed on the Rh surface, leading to its progressive accumulation, (ii) the activity of the catalyst increases progressively with increasing coverage of Rh with oxygen, and (iii) above a threshold concentration of oxygen on the Rh surface, a rapid reconstruction of Rh particles occurs with release of the chemisorbed oxygen and the start of a new oscillation cycle, but only in the presence of water in the feed. It is also shown that the presence of water in the feed, inducing the desorption of chemisorbed oxygen from the Rh surface, stabilizes a more reduced working state of the catalyst surface.