Azeotropes have been studied for decades due to the challenges they impose on separation processes but fundamental understanding at the molecular level remains limited. Although molecular simulation has demonstrated its capability of predicting mixture vapor-liquid equilibrium (VLE) behaviors, including azeotropes, its potential for mechanistic investigation has not been fully exploited. In this study, we use the united atom transferable potentials for phase equilibria (TraPPE-UA) force field to model the ethanol/benzene mixture, which displays a positive azeotrope. Gibbs ensemble Monte Carlo (GEMC) simulation is performed to predict the VLE phase diagram, including an azeotrope point. The results accurately agree with experimental measurements. We argue that the molecular mechanism of azeotrope formation cannot be fully understood by studying the mixture liquid-state stability at the azeotrope point alone. Rather, azeotrope occurrence is only a reflection of the changing relative volatility between the two components over a much wider composition range. A thermodynamic criterion is thus proposed on the basis of the comparison of partial excess Gibbs energy between the components. In the ethanol/benzene system, molecular energetics shows that with increasing ethanol mole fraction, its volatility initially decreases but later plateaus, while benzene volatility is initially nearly constant and only starts to decrease when its mole fraction is low. Analysis of the mixture liquid structure, including a detailed investigation of ethanol hydrogen-bonding configurations at different composition levels, reveals the underlying molecular mechanism for the changing volatilities responsible for the azeotrope.