We addressed the electronic structure of Cu atoms embedded in hexagonal boron nitride (h-BN) and their catalytic role in CO oxidation by first-principles-based calculations. We showed that Cu atoms prefer to bind directly with the localized defects on h-BN, which act as strong trapping sites for Cu atoms and inhibit their clustering. The strong binding of Cu atoms at boron vacancy also up-shifts the energy level of Cu-d states to the Fermi level and promotes the formation of peroxide-like intermediate. CO oxidation over Cu atoms embedded in h-BN would proceed through the Langmuir-Hinshelwood mechanism with the formation of a peroxide-like complex by reaction of coadsorbed CO and O2, with the dissociation of which the a CO2 molecule and an adsorbed O atom are formed. Then, the embedded Cu atom is regenerated by the reaction of another gaseous CO with the remnant O atom. The calculated energy barriers for the formation and dissociation of peroxide complex and regeneration of embedded Cu atoms are as low as 0.26, 0.11 and 0.03 eV, respectively, indicating the potential high catalytic performance of Cu atoms embedded in h-BN for low temperature CO oxidation. © the Partner Organisations 2014.