A computational study using density functional theory is carried out to investigate the reaction mechanism of ethanol steam reforming on Co(0001) surfaces. The adsorption properties of the reactant, possible intermediates, and products are carefully examined. The reaction pathway and related transition states are also analyzed. According to our calculations, the reforming mechanism primarily consisting of dehydrogenation steps of ethanol, ethoxy, methanol, methoxy, and formic acid, is feasible on Co(0001) surfaces. It is also found that the reaction of formaldehyde yielding formic acid and hydrogen may not be an elementary reaction. The dehydrogenation of ethoxy possesses the highest barrier and is accordingly identified as the rate-determining step.