Density functional theory calculations have been carried out to explore the effect of hydrogen on the oxidation of CO in relation to the preferential oxidation of CO in the presence of excess hydrogen (PROX). A range of gold surfaces have been selected including the (100), stepped (310) surfaces and diatomic rows on the (100) surface. These diatomic rows on Au(100) are very efficient in H-H bond scission. O2 hydrogenation strongly enhances the surface-oxygen interaction and assists in scission of the O–O bond. The activation energy required to make the reaction intermediate hydroperoxy (OOH) from O2 and H is small. However, we postulate its presence on our Au models as the result of diffusion from oxide supports to the gold surfaces. The OOH on Au in turn opens many low energy cost channels to produce H2O and CO2. CO is selectively oxidized in a H2 atmosphere due to the more favorable reaction barriers while the formation of adsorbed hydroperoxy enhances the reaction rate.