The catalytic CO methanation reaction on Ni/CeO2(111) systems is known to depend on Ni coverage: at medium and large coverages, Ni/CeO2(111) surfaces are able to catalyze methane production, whereas at small coverage they become efficient catalysts for the water–gas shift reaction. Electronic structure, geometries, and the adsorption of C and CO on small Nin(n= 1 and 4) particles deposited on CeO2(111) have been studied using density functional theory (DFT) with the DFT+U approach and compared with Ni(111) and CeO2(111). The most stable Ni4cluster has a pyramidal structure (pyr-Ni4), and a planar rhombohedral structure (r-Ni4) is less stable by ∼0.2 eV. Metallic Ni particles are partially oxidized (Ni2+/Ni1+) upon deposition on the ceria support, which is partially reduced. C species are strongly bound on Ni(111), whereas on Ni/CeO2(111), and on the bare support, oxidative adsorption (C + CeO2→ CO + CeO2–x) is mostly preferred, opening a Mars–van Krevelen mechanism to prevent coke formation. The exothermicity of nonoxidative adsorption of C on nickel sites follows the trend: Ni1/CeO2(111) < pyr-Ni4/CeO2(111) < Ni(111). On these systems, CO adsorption is nonoxidative. The C–O bond strength follows the inverse trend of the nonoxidative adsorption of C: Ni(111) < pyr-Ni4/CeO2(111) < Ni1/CeO2(111). The stronger C–O bond found for the CO/Ni1/CeO2(111) system compared with CO/Ni(111) provides an explanation of the Ni coverage dependence reported for the CO methanation reaction on Ni/CeO2(111) catalysts. The strong electronic perturbations in the Ni1adatoms produce a drastic change in their chemical properties.