Ni-based oxygen carriers (OCs) are considered promising materials in the chemical looping combustion (CLC) process. However, the reactivity of Ni-based OCs still offers the potential for further enhancement. In this work, the Li doping method has been employed for the modification of Ni-based OCs. The reactivity and microreaction mechanisms of different concentrations of Li-doped Ni-based OCs with CO in CLC are clarified using density functional theory (DFT) simulation. The structures, energy, and density of states are obtained through computational investigation of the reaction path in elementary reactions. The results show that (1) the adsorption energies of CO molecules on NiO surfaces with 4, 8, and 12% Li doping concentrations are −0.53, −0.48, and −0.54 eV, respectively, demonstrating an enhanced reactivity compared to that of pure NiO (−0.41 eV); (2) the calculation of the transition state indicates that the most favorable pathway for CO oxidation takes place on the surface of NiO with an 8% Li doping concentration, exhibiting the lowest energy barrier of 0.51 eV; and (3) the oxygen vacancy formation energies on the surface of NiO are 3.05, 2.30, and 2.10 eV for 4, 8, and 12% doping concentrations, respectively. Additionally, the decrease in oxygen vacancy formation energies exhibits a gradual decline with an increasing Li doping concentration. By comprehensive analysis, 8% is considered to be the optimal doping concentration of NiO for chemical looping combustion.