A comprehensive density functional theory study of the Fischer–Tropsch mechanism on the corrugated Ru(111) surface has been carried out. Elementary reaction steps relevant to the carbide mechanism and the CO insertion mechanism are considered. Activation barriers and reaction energies were determined for CO dissociation, C hydrogenation, CHx + CHy and CHx + CO coupling, CHxCHy–O bond scission and hydrogenation reactions, which lead to formation of methane and higher hydrocarbons. Water formation that removes O from the surface was studied as well. The overall barrier for chain growth in the carbide mechanism (preferred path CH + CH coupling) is lower than that for chain growth in the CO insertion mechanism (preferred path C + CO coupling). Kinetic analysis predicts that the chain-growth probability for the carbide mechanism is close to unity, whereas within the CO insertion mechanism methane will be the main hydrocarbon product. The main chain propagating surface intermediate is CH via CH + CH and CH + CR coupling (R = alkyl). A more detailed electronic analysis shows that CH + CH coupling is more difficult than coupling reactions of the type CH + CR because of the σ-donating effect of the alkyl substituent. These chain growth reaction steps are more facile on step-edge sites than on terrace sites. The carbide mechanism explains the formation of long hydrocarbon chains for stepped Ru surfaces in the Fischer–Tropsch reaction.