Oxygen dissociation is one of the most critical steps in the CO oxidation reaction on transition metal surfaces. It has been shown both experimentally and theoretically that oxygen dissociation on clean platinum (Pt) surface proceeds via a precursor-mediated reaction path, with negligible activation barrier. On the other hand, the oxygen dissociation pathway under diesel engine operating conditions, where the metal surface is packed with CO molecules, is understood less clearly. In this paper, we report density functional theory calculations for O2 dissociation on Pt(111) in the presence of varying CO coverage. Classical Monte Carlo simulations have been used to get an estimate of coadsorbed CO and O2 configurations. Oxygen molecular precursor states binding energies were found to shift up in energy with increasing CO coverage, with transition state energies and final product energies following the same trend. The dissociated product state becomes endothermic beyond a critical CO coverage of 0.44 monolayer, where oxygen dissociation is no longer energetically favored on Pt(111). The origin of the change in activation barrier can be attributed to the limited space available for oxygen dissociation and the lateral repulsion from neighboring CO molecules. A linear correlation exists between the oxygen dissociation barrier and the molecular precursor binding energy. These findings give useful insight into the CO oxidation mechanism under realistic diesel engine operating conditions.