The interaction and mechanism for CO oxidation on a Ru-modified CeO2 surface have been investigated by using periodic density functional theory calculations corrected with the on-site Coulomb interaction via a Hubbard term (DFT + U). Our calculations showed that (i) the Ru dopant facilitates oxygen vacancy formation, while the Ru adatoms may suppress oxygen vacancy formation. (ii) Physisorbed CO, physisorbed CO2, and chemisorbed CO (carbonite, CO2-) species are observed on the Ru-doped CeO2(111) surface; in contrast, only physisorbed CO is found on the clean CeO2(111) surface. The vibrational frequency calculations are carried to characterize these species. (iii) Incorporating Ru ions into the ceria lattice as substitutional point defects can instead sustain a full catalytic cycle for CO oxidation and catalyst regeneration. The Ru dopant promotes CO oxidation without any activation energy leading to O vacancy formation and CO2 desorption. Molecular O-2 adsorbs at the O vacancy forming O adspecies that then drive CO oxidation and recover the stoichiometric Ru-doped CeO2 surface. The Bader charge analysis is carried to characterize the oxidation state of Ru ions along the catalytic cycle.