Whether gold is catalytically active on its own has been hotly debated since the discovery of gold-based catalysis in the 1980s. One of the central controversies is on the O(2) activation mechanism. This work, by investigating aerobic phenylethanol oxidation on gold nanoparticles in aqueous solution, demonstrates that gold nanoparticles are capable to activate O(2) at the solid-liquid interface. Extensive density functional theory (DFT) calculations combined with the per-iodic continuum solvation model have been utilized to provide a complete reaction network of aerobic alcohol oxidation. We show that the adsorption of O(2) is very sensitive to the environment: the presence of water can double the O(2) adsorption energy to similar to 0.4 eV at commonly available edge sites of nanoparticles (similar to 4 nm) because of its strongly polarized nature in adsorption. In alcohol oxidation, the hydroxyl bond of alcohol can break only with the help of an external base at ambient conditions, while the consequent alpha-C-H bond breaking occurs on pure Au, both on edges and terraces, with a reaction barrier of 0.7 eV, which is the rate-determining step. The surface H from the alpha-C-H bond cleavage can be easily removed by O(2) and OOH via a H(2)O(2) pathway without involving atomic O. We find that Au particles become negatively charged at the steady state because of a facile proton-shift equilibrium on surface, OOH + OH <-> O(2) + H(2)O. The theoretical results are utilized to rationalize experimental findings and provide a firm basis for utilizing nanopartide gold as aerobic oxidation catalysts in aqueous surroundings.