Density functional B3LYP/6-311+G(3df, 2p)//B3LYP/6-31G** calculations show that strong η1- and η2-coordinated complexes, HScOH–N2 (2A′) and N2Sc(H)OH (2A″), bound 28.1 and 31.0 kcal/mol, respectively, can be formed in the ScO/N2/H2 system. The calculations reveal interesting interplay between the H2 and N2 ligands, as an addition of H2 increases the reactivity of ScO with respect to N2 and vice versa. ScO is demonstrated to enhance the reaction of nitrogen hydrogenation through the ScO (2Σ+) + N2 + H2 → TS2 → N2ScO (2A″) + H2 → N2ScO–H2 (2A″) → TS3 → N2Sc(H)OH (2A″) → TS5 → NN(H)ScOH TS6 → N2H2ScO (2A′) mechanism.