Since the discovery of a series of Au-based catalysts by Haruta et al. considerable progress has been made in understanding the active role of Au in CO oxidation catalysis. This review provides a summary of recent theoretical work performed in this field; in particular it addresses DFT studies of CO oxidation catalysis over free and supported gold nanoparticles. Several properties of the Au particles have been found to contribute to their unique catalytic activity. Of these properties, the low-coordination state of the Au atoms is arguably the most pertinent, although other properties of the Au cluster atoms, such as electronic charge, cannot be ignored. The current consensuses regarding the mechanism for CO oxidation over Au-based catalysts is also discussed. Finally, water-enhanced catalysis of CO oxidation on Au clusters is summarized.