Direct propylene epoxidation (DPE) with molecular oxygen is an effective process of conversion of propylene into propylene oxide (PO), which is an essential intermediate compound for many petrochemical products such as propylene glycol, propylene carbonate, polyurethane foams, etc. The modification of Ag‐based catalysts which prevents overoxidation and improves catalytic activity for PO production is studied by simulating Ag2O and mixed metal oxides of Ag2O‐CuO (Ag2CuO2), Ag2O‐ZnO (Ag2ZnO2) and Ag2O‐Fe2O3 (Ag2Fe2O4) catalysts using density functional theory (DFT). Instantaneous adsorption of propylene was observed over Ag2ZnO2 and Ag2CuO2. DPE with oxygen via the Mars‐Van Krevelen mechanism (MVKM) was investigated considering propylene and oxygen as alternatively adsorbed species and molecular species. DPE with molecular oxygen and adsorbed propylene required 1.7 times more activation energy than DPE with molecular propylene and adsorbed oxygen. DPE with oxygen via the Lagmuir‐Hinshelwood mechanism (LHM) required 3–4 times more activation energy than MVKM for Ag2O and Ag2CuO2, whereas it is comparable for Ag2ZnO2. This showed that both mechanisms are followed for DPE over Ag2ZnO2. Ag2ZnO2 was found to be the optimum catalyst for DPE with instantaneous adsorption of propylene and instantaneous desorption of PO.