Gold and gold-silver alloys can be active and selective oxidation catalysts. Previous work has suggested that O-2 dissociation occurs at bimetallic step sites on gold-silver alloys, but the site responsible for the rest of the reaction steps has not been studied. As a first step in gaining insight into this issue, we investigated the adsorption of oxygen and other oxidation intermediates on the (111) and (211) facets of gold-silver alloys using density functional theory. Oxygen and silver coverage effects were analyzed, and different model structures were compared. We also examined the energy barriers for the diffusion of atomic oxygen to gain insight into O migration and spillover. On (111) surfaces, O adsorption is much stronger at low O coverage (less than 0.22 ML), while on (211) surfaces O is strongly bound at both high and low O coverage. O diffusion across the step is faster than diffusion along the step. Ag stabilizes O, both when directly bound to it and when in an adjacent site. Ag also reduces repulsive O-O interactions at low O coverage. Our calculated reaction barriers for O-assisted CH3O dehydrogenation suggest that reaction is faster on steps than on terraces. Overall, our findings suggest that spillover of O from Ag-rich steps to Au-rich terraces does not occur and that oxidation reactions on gold-silver alloys occur on step sites. More specifically, oxidation likely occurs either on Ag-rich step sites or on Au-rich step sites that are adjacent to Ag-rich step sites.