We have investigated the reaction of ammonia with the oxygen-covered Ag(110)-p(2x1)-O surface using scanning tunneling microscopy (STM). The Ag(110)-p(2x1)-O surface has a well established structure, with added -Ag-O- rows running in the [001] directions separated by two lattice units in the [110] directions. The reaction of ammonia with the preadsorbed oxygen forms NH(a) structures at 300 K and frees Ag atoms, leading to the recrystallization of large islands spread over the surface. The nucleation process involved in island formation is affected by ammonia pressure. A local reaction front was observed in real time to progress across the surface, forming new, small islands of adsorbate-covered silver in its wake. Heating the surface to 450 K produces mixed N(a) and compressed O(a) structures with higher coverage. Structural models are proposed based on the STM images.