A first-principles formalism is employed to investigate the interaction of iron oxide (FeO) with a boron nitride (BN) nanotube. The stable structure of the FeO-nanotube has Fe atoms binding N atoms, with bond length of roughly similar to 2.1 angstrom, and binding between O and B atoms, with bond length of 1.55 angstrom. In case of small FeO concentrations, the total magnetic moment is (4 mu(Bohr)) times the number of Fe atoms in the unit cell, and it is energetically favorable to FeO units to aggregate rather than randomly bind to the tube. As a larger FeO concentration case, we study a BN nanotube fully covered by a single layer of FeO. We found that such a structure has a square FeO lattice with Fe-O bond length of 2.11 angstrom, similar to that of FeO bulk, and total magnetic moment of 3.94 mu(Bohr)/Fe atom. Consistent with experimental results, the FeO covered nanotube is a semi-half-metal which can become a half-metal if a small change in the Fermi level is induced. Such a structure may be important in the spintronics context.