The effect of water on CO oxidation over a Au/Fe 2 O 3 catalyst, fabricated by dispersing 2.3 nm Au particles on a rod-shaped Fe 2 O 3 , was examined comprehensively. Under the dry gas condition (a CO/O 2 mixture), the reaction occurred via a redox mechanism at the Au−Fe 2 O 3 interface, where CO was adsorbed by Au and O 2 was activated by Fe 2 O 3 . However, adding an appropriate amount of H 2 O to the feed stream has altered the reaction pathway and promoted the activity substantially. The Au particles showed a reaction rate of 0.64 mmol CO g Au −1 s −1 at 30 °C with a dry feed gas of 1.0% CO/20.0% O 2 /He, but the addition of 3.0% H 2 O to the reaction gas dramatically enhanced the reaction rate to 5.27 mmol CO g Au −1 s −1 . Detailed spectroscopic characterizations have identified that CO oxidation in the presence of H 2 O followed a water-assisted pathway rather than the conventional redox route. H 2 O promoted the activation of O 2 pronouncedly at the Au−Fe 2 O 3 interface; it might react with O 2 over Fe 2 O 3 , and the generated hydroxyl (−OH) species further interacted with CO, adsorbed on Au particles, forming carboxylate (−COOH) species. Finally, the carboxylate decomposed into CO 2 via a proton transfer to H 2 O.