The effect of carbon monoxide (CO) co-adsorption on the dissociation of water on the Ni(111) surface has been studied using density functional theory. The structures of the adsorbed water molecule and of the transition state are changed by the presence of the CO molecule. The water O-H bond that is closest to the CO is lengthened compared to the structure in the absence of the CO, and the breaking O-H bond in the transition state structure has a larger imaginary frequency in the presence of CO. In addition, the distances between the Ni surface and H2O reactant and OH and H products decrease in the presence of the CO. The changes in structures and vibrational frequencies lead to a reaction energy that is 0.17 eV less exothermic in the presence of the CO, and an activation barrier that is 0.12 eV larger in the presence of the CO. At 463 K the water dissociation rate constant is an order of magnitude smaller in the presence of the CO. This reveals that far fewer water molecules will dissociate in the presence of CO under reaction conditions that are typical for the water-gas-shift reaction.