We present a density functional study on the mechanism of metal dusting at surfaces of transition metal oxides. The present study focuses on one of the major metal dusting processes: the Boudouard reaction on FeO(100) surface. Cluster models are used to represent the surface and the effects of cluster sizes and relaxation upon CO adsorption are carefully examined. It is found that the CO adsorption on a well-aligned transition metal oxide surface is very weak and does not lead to CO-bond dissociation. A minimum energy path of a gas-phase CO attacking an adsorbed CO from the surface normal is calculated and the structural change of the reaction species along the reaction path is examined. The results suggest that the Boudouard reaction is extremely unfavorable energetically at the transition metal oxide surfaces and that a pitting mechanism dictates the dusting process, in agreement with practical observations.