The dynamic disintegration of supported cluster to form single atom (SA) could be of vital importance for CO oxidation process, but its influence on catalytic activity remains vague. Herein, we performed density functional theory (DFT) calculations on CO oxidation over Gd-doped ceria supported Cu catalysts and aims to figure out the role of dynamic SA site stimulated by Gd doping and CO-saturated adsorption in the catalytic performance. Three typical ceria-supported Cu10 (Cu10-CeO2) catalyst models were built with 0 at%, 12.5 at%, and 25 at% Gd-doping content, respectively. Two possible catalytic cycles of CO oxidation on Cu10-CeO2) catalyst, i.e., O2-assisted path and lattice-O (OL)-activated path, were carefully searched by calculating relevant potential energy surfaces. Microkinetic simulation demonstrates that the O2-assisted path prefers for the CO oxidation on the CeO2 and its lower-content Gd-doped surface supported Cu10 cluster, while the OL-activated path is followed with enhanced reaction rates due to the dynamic SA active site formed from Cu10 supported on the higher-content Gd-doped CeO2 surface.