The adsorption and dissociation of O2 molecules on Si(111)-(7×7) surface have been studied by first-principles calculations. Our results show that all the O2 molecular species adsorbed on Si(111)-(7×7) surface are unstable and dissociate into atomic species with a small energy barrier about 0.1 eV. The single O2 molecule adsorption tends to form an ins×2 or a new metastable ins×2* structure on the Si adatom sites and the further coming O2 molecules adsorb on those structures to produce an ad-ins×3 structure. The ad-ins×3 structure is indeed highly stable and kinetically limited for diving into the subsurface layer to form the ins×3-tri structure by a large barrier of 1.3 eV. Unlike the previous views, we find that all the ad-ins, ins×2, and ad-ins×3 structures show bright images, while the ins×2*, ins×3, and ins×3-tri structures show dark images. The proposed oxidation pathways and simulated scanning tunneling microscope images account well for the experimental results and resolve the long-standing confusion and issue about the adsorption and reaction of O2 molecules on Si(111) surface.