Catalytic conversion of NO has long been a focus of atmospheric pollution control and diesel vehicle exhaust treatment. Rhodium is one of the most effective metals for catalyzing NO reduction, and understanding the nature of the active sites and underlying mechanisms can help improve the design of Rh-based catalysts towards NO reduction. In this work, we investigated the detailed catalytic mechanisms for the direct reduction of NO to N2 by fullerene-supported rhodium clusters, C60Rh4+, with density functional theory calculations. We found that the presence of C60 facilitates the smooth reduction of NO into N2 and O2, as well as their subsequent desorption, recovering the catalyst C60Rh4+. Such a process fails to be completed by free Rh4+, emphasizing the critical importance of C60 support. We attribute the novel performance of C60Rh4+ to the electron sponge effect of C60, providing useful guidance for designing efficient catalysts for the direct reduction of NO.