Adsorption and oxidation of CO on a CeO2(111) surface terminated by bridging oxygen atoms were systematically investigated using density functional theory (DFT). We found that O2 adsorption on a clean CeO2(111) surface was weak physisorption; while strong chemical adsorption occurred and the O—O bond was activated with a bond length of 0.143 nmin the present of surface oxygen vacancy. CO adsorption onto a clean CeO2(111) surface and a surface with oxygen vacancies occurred through physisorption with both adsorption energies being less than 0.42 eV. With O2 adsorption onto a surface with oxygen vacancies (O2/Ov), CO might absorb strongly on the surface to form a bidentate carbonate intermediate or directly produce CO2 without an energy barrier. The carbonate intermediate might desorb as CO2 with an energy barrier of 0.28 eV using a climbing nudged elastic band (CNEB). We also found that the values of the Hubbard U parameter affected the CO adsorption energy in the presence of surface oxygen vacancies. Our results indicate that a possible effect of the ceria support on catalytic oxidation consists of O2 adsorbing onto the CeO2(111) surface with oxygen vacancies which can be easily activated to form reactive oxygen species and then take part in the CO oxidation reaction.