We applied periodic density-functional theory (DFT) to investigate the dehydrogenation of ethanol on a Rh/CeO2 (111) surface. Ethanol is calculated to have the greatest energy of adsorption when the oxygen atom of the molecule is adsorbed onto a Ce atom in the surface, relative to other surface atoms (Rh or O). Before forming a six-membered ring of an oxametallacyclic compound (Rh-CH2CH2O-Ce-(a)), two hydrogen atoms from ethanol are first eliminated; the barriers for dissociation of the O-H and the beta-carbon (CH2-H) hydrogens are calculated to be 12.00 and 28.57 kcal/mol, respectively. The dehydrogenated H atom has the greatest adsorption energy (E-ads = 101.59 kcal/mol) when it is adsorbed onto an oxygen atom of the surface. The dehydrogenation continues with the loss of two hydrogens from the alpha-carbon, forming an intermediate species Rh-CH2CO-Ce-(a), for which the successive barriers are 34.26 and 40.84 kcal/mol. Scission of the C-C bond occurs at this stage with a dissociation barrier E-a = 49.54 kcal/mol, to form Rh-CH2(a) + 4H((a)) + CO(g). At high temperatures, these adsorbates desorb to yield the final products CH4(g), H-2(g), and CO(g).