Bimetallic nanoparticles composed of two different metals such as Au–Ag show novel catalytic behavior based on the effect of the second metal element added. Considering this fact, we have performed density functional theory (DFT) calculations to study the oxidation pathway of NO promoted by anionic Au–Ag− dimer. During our investigations, we have considered two most plausible pathways of NO oxidation. We found that the anionic Au–Ag− dimer can effectively catalyze NO oxidation reaction. In Au–Ag−, the Au site is more active than the Ag site, and the calculated energy barrier values for the rate determining step of the Au-site catalytic reaction are remarkably lower than those for both the Ag-site catalytic reactions. The present results enrich our understanding of the catalytic oxidation of NO by Au–Ag cluster based catalyst. For the first time, we have presented a systematic study on the structure and energetics of various reaction intermediates involved in NO oxidation by Au–Ag− dimer using DFT. The T1 diagnostic calculation suggests that the multi-reference character is not an issue for the present study.