Herein we describe a computational study undertaken in an effort to elucidate the reaction mechanisms behind the experimentally observed oxidations and hydrations catalyzed by graphene oxide (GO). We used the oxidation of benzyl alcohol to benzaldehyde as a model reaction and DFT calculations revealed that the reaction occurred via the transfer of hydrogen atoms from the organic molecule to the GO surface. In particular, neighboring epoxide groups that decorate the GO basal plane were ring‐opened, which resulted in the formation of diols, followed by dehydration. Our calculations were consistent with the experimentally observed dependence of this chemistry on molecular oxygen, and revealed that the partially reduced catalyst was able to be recharged by molecular oxygen, which allows for catalyst turnover. Functional group‐free carbon materials, such as graphite, were calculated as having substantially higher reaction barriers, which indicates that the high chemical potential and rich functionality of GO are necessary for the observed reactivity.