Although substantial advances have been made in a few reactions of industrial significance over single-atom catalysts (SACs), the origin of the superior catalytic performance, the nature of the active sites, and the reaction pathways are still the subject of debate. Even for CO oxidation over SACs on nonreducible substrates, the understanding is limited. We investigated the performance of Pd atoms monodispersed on graphene (PdGr) in CO oxidation. Combining first-principles-based thermodynamics calculations and microkinetics modeling, we showed that the positively charged PdGr can exhibit a rather high lowerature activity in CO oxidation. Under reaction conditions, the Pd atom binds strongly with O2, acting as the reactive species to convert CO. A comparison of the conversion rates of steps along different potential reaction pathways provides direct evidence that CO oxidation mainly proceeds through revised Langmuir-Hinshelwood pathways, and the dissociation of the peroxide intermediate (O-O-Câ• O) is the rate-limiting step. The predicted catalytic performance was attributed to the specific electronic structure of PdGr with the positively charged Pd on graphene monovacancy exposing sp-type frontier states. We expect these findings to help in understanding the performance of SACs and to guide the design and fabrication of SACs with superior catalytic performance.