In this work, we have suggested the possibility of using carbon nanotubes to remove toxic gas. By taking an advantage of the density functional theory, we have investigated the decomposition of nitrous oxide (N(2)O) on the sidewalls of the perfect and the Stone-Wales defect armchair (5,5)-SWNTs at the B3LYP/6-31G(d) level of theory. There are two reaction mechanisms proposed: stepwise and concerted pathways. Our calculations predict that the former route is kinetically favored on both the perfect and defect SWNTs with barrier heights of the rate-determining steps of 37.23 and 34.38 kcal/mol for the perfect and the defect systems, respectively. In the second pathway, the decomposition of nitrous oxide gas takes place in a single step with higher reaction barriers of 48.60 and 40.27 kcal/mol on the sidewalls of the perfect and the defect SWNTs, respectively. Moreover, we also demonstrated that an encapsulation of electron rich species, such as chloride anion, inside the channel of the SWNT can boost up the reaction rate of the N(2)O decomposition on the SWNT. The chloride ion supplies excess electrons to the SWNT for transferring to the N(2)O molecule causing lower reaction barriers in the reaction pathways.