Niobium-based oxide nanoparticles have proven to be catalytically effective toward hydrogenation of Mg where H2 dissociation over the niobium-oxides is considered to be a crucial reaction step. However, the role of niobium oxides toward H2 dissociation still remains unclear as to what atomic configurations are responsible for the catalytic activity. H2 dissociation over different surface planes of Nb, NbO, and Nb2O5 as well as small NbO clusters is performed by using a density functional theory. The calculations reveal that H2 dissociation, adsorption energy, and the bond type between H and surfaces (clusters) depend on the atomic configurations of Nb and O. In particular, H2 adsorption on NbO(111) is enhanced by O atoms without forming O-H bond where the bond type of H and surface is found to be an electron pairing. Thus, NbO(111) could not only be a effective catalyst but also potentially prevent the formation of MgO during the hydrogenation of Mg. The results should be helpful in developing and tailoring the efficient catalyst toward H2 dissociation and hydrogenation of Mg.