This work addresses the chemical nature of the catalytic activity of X-ray "pure" CoO nanocrystals. All samples were prepared by a solvothermal reaction route. X-ray diffraction indicates the formation of CoO in a cubic rock-salt structure, while infrared spectra and magnetic measurements demonstrate the coexistence of CoO and Co3O4. Therefore, X-ray "pure" CoO nanocrystals are a unique composite structure with a CoO core surrounded by an extremely thin Co3O4 surface layer, which is likely a consequence of the surface passivation of COO nanocrystals from the air oxidation at room temperature. The COO core shows a particle size of 22 or 280 nm, depending on the types of the precursors used. This composite nanostructure was initiated as a catalytic additive to promote the thermal decomposition of ammonium perchlorate (AP). Our preliminary investigations indicate that the maximum decomposition temperature of AP is significantly reduced in the presence Of CoO/Co3O4 composite nanocrystals and that the maximum decomposition peak shifts toward lower temperatures as the loading amount of the composite nanocrystals increases. These findings are different from the literature reports when using many nanoscale oxide additives. Finally, the decomposition heat for the low-temperature decomposition stages of AP was calculated and correlated to the chemical nature of the CoO/Co3O4 composite nanostructures.