The single-atom catalysis of O2 activation and CO oxidation with Rh1 supported on γ-Al2O3 is investigated here through ab initio molecular dynamics techniques. We scrutinize the molecular details of the mechanism for the full catalytic cycle that involves the oxidation of two CO molecules in succession. The effect of the surface hydration and oxidation state of Rh on the kinetics of O2 activation and CO oxidation is presented. We also report here the catalytic activity of experimentally intercepted RhI(CO)2 on γ-Al2O3. Furthermore, we delineate the importance of single-atom catalysis by comparing the performance of the Rh6/Al2O3 catalyst. A molecular level understanding of the differential reactivity on hydration, on oxidation, and of a larger Rh cluster size is reported.