The sorption-enhanced water gas shift reaction (WGSR) using CaO-based materials is a promising technology for H2 production, which can be further improved with the Ce-modified CaO material. However, the underlying mechanism for WGSR with the assistance of Ce-modified CaO remains unclear. A Ce-modified CaO periodic slab model was established in this paper, and the density functional theory (DFT) simulations for WGSR characteristics on Ce-modified CaO surface were performed. The results demonstrate that the Ce-modified CaO exhibits higher electron density, and the electron transfer between Ce and adjacent O is observed. The Ce doping obliterates the band gap of CaO, and the Fermi level is penetrated by O 2p orbit of Ce-modified CaO. The intermediates involved in WGSR exhibit obvious mutual promotion for co-adsorption with Ce-modification, and the H2 desorption is facilitated by the absorbed CO2. Ce doping avoids the generation of an additional intermediate, and the energy barriers of H2 generation and CO2 adsorption are reduced. The rate-limiting step on Ce-modified CaO is altered to the cleavage of O–H bond and formation of CO2 radical, and the energy barrier is 2.15 eV, which is 34.6% lower than that on CaO. Therefore, the enhancement mechanism on H2 production in WGSR resulted by Ce-modified CaO was determined.