Periodic density functional calculations have been carried out to investigate both the thiol adsorption on Au(111) surface and the reaction mechanism for the formation of the self-assembled monolayers, taking propanethiol as a representative example. The effect of coverage and surface defects (adatoms and vacancies) has been analyzed. It is found that the most stable physisorption (undissociated) site is an adatom site, whereas the chemisorption site for the thiol is a vacancy site or protrusion consisting of a pair of adatoms, followed by one adatom site. The results point out that the thiolate self-assembled monolayer adsorption process occurs preferentially on step edges.