The functionalization of graphene (a single graphite layer) by the addition of transition metal atoms of Mn, Fe and Co to its surface has been investigated computationally using density functional theory. In the calculation, the graphene surface supercell was constructed from a single layer of graphite (0001) surface separated by vertical vacuum layers 2 nm thick. We found that the center of the hexagonal ring formed by carbon from graphene is the most stable site for Mn, Fe, Co to stay after optimization. The calculated spin-polarized band structures of the graphene encapsulating the Mn adatom indicate that the conduction bands are modified and move down due to the coupling between the Mn atom and graphene. For Fe adsorbed on the graphene surface, it is semi-half-metallic, and the spin polarization P is found to be 100%. The system of Co adatom on graphene exhibits metallic electronic structure due to the density of states (DOS) peak at the band center with both majority and minority spins. Local density of states analyses indicate a larger promotion of 4s electrons into the 3d state in Fe and Co, resulting in lower local moments compared to an Mn adatom on the graphite surface. ©IOP Publishing Ltd.