Exfoliated two-dimensional early transition metal carbides and carbonitrides are usually not terminated by metal atoms but saturated by O, OH, and/or F, thus making it difficult to understand the surface structure evolution and the induced electronic modifications. To fill this gap, density functional theory and molecular dynamics simulations are performed to capture the initial stage of the oxidation process of Ti2C, a prototypical example from the recently fabricated class of two-dimensional carbides and carbonitrides. It is shown that the unsaturated Ti 3d orbitals of the pristine Ti2C surface interact strongly with the approaching O2 molecules, resulting in barrierless O2 dissociation. The diffusion of the dissociated O atoms is also found to be very facile. Molecular dynamics simulations suggest that both dissociation and diffusion are enhanced as the O2 coverage increases to 0.25 monolayer. For a coverage of less than 0.11 monolayer, the adsorbates lead to a minor modification of the electronic properties of Ti2C, while the modification is remarkable at 0.25 monolayer. The formed Ti2CO2 after O saturation is an indirect narrow gap semiconductor (0.33 eV) with high intrinsic carrier concentration at room temperature and high thermodynamic stability at intermediate temperature (e.g., 550 °C).