We investigate the role of defects—adatoms, vacancies, and steps—in the bonding and reaction of propene on Au(111) containing atomic oxygen, using density functional theory (DFT) calculations. The adsorption of propene is stronger on a surface containing defects compared to the flat, bulk-terminated surface, with the largest gain in binding (~0.7 eV) on a surface with a 1/9 monolayer (ML) of Au adatoms. Charge-density difference plots reveal that the difference between defective surfaces and the bulk-terminated surface is a more pronounced depletion of electron density from the carbon–carbon p bond and a charge accumulation between the double bond and the gold atom to which the propene is bound. We calculate the energy barriers for two competing reactions that are important in determining the selectivity for propene oxidation. Allylic H abstraction by adsorbed O leads to combustion, whereas O addition to form an oxymetallacycle is the first step in propene epoxide formation. A comparison of the energetics of these two pathways on flat and defect-containing Au surfaces indicates that the reactivity depends on the nature and prevalence of surface defects. Both electronic and geometric factors, such as the path and the distance the oxygen must travel to meet the allylic hydrogen for abstraction, are important in explaining the reaction trends.