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We present the results of first principles calculations for the magnetism of Rh adlayers on MgO(0 0 1), at three different adsorption sites and three different coverages, corresponding to 1, 1/2 and 1/8 monolayers. Finite magnetization is found in all cases except that of one Rh monolayer above the oxygen site, which is also the most stable. We examine how the magnetization changes as a function of the Rh-surface distance and relate this to changes in the real-space charge density and in the density of states (DOS) as the Rh adlayer interacts with the surface. We find that increasing either the Rh-Rh interaction strength or the Rh-surface interaction strength leads to reduced magnetization, while increasing the former drives a crossover from localized (atomic) to itinerant magnetism. Neither the magnetic transition itself, nor the localized-to-itinerant magnetism crossover, is found to be directly related to the formation of Rh-surface bonds. From a practical point of view, we predict that magnetism in the Rh-MgO(0 0 1) system is most likely to be found experimentally at reduced coverages and at low temperatures.