Copper species dispersed on ceria have emerged as promising catalysts for various energy and environmental applications. However, the presence of water vapor in the actual application environment can significantly hinder the catalyst activity. Flame-synthesized catalysts have been found to possess good water resistance as well as strong mercury oxidation and sulfur resistance. In this study, two types of copper-cerium binary structures were compared: Cu/CeO2 and CuO/CeO2, which represent highly dispersed copper on the CeO2 lattice surface (the main structure of the flame-synthesized catalyst) and CuO clusters supporting on the CeO2 lattice (the main structure of catalyst synthesized by impregnation methods), respectively. The adsorption energies of SO2, H2O, and Hg0 over these structures were studied by density functional theory calculations. The results revealed that Cu-O2/CeO2 (Cu/CeO2 with absorbed O2) had the highest Hg0 adsorption energy (−81.4 kJ/mol), followed by CuO/CeO2 (−13.1 kJ/mol) and CeO2 (−4.4 kJ/mol). Both Cu-O2/CeO2 and CuO/CeO2 showed improved sulfur resistance compared to CeO2, because SO2 was preferentially absorbed on copper sites, protecting the active sites on the CeO2 surface·H2O was absorbed and hydrolyzed into hydroxyl groups on the surfaces of all structures. The hydrolysis process consumed active oxygen on the CeO2 surface for CeO2 and CuO/CeO2, but consumed oxygen absorbed from the surrounding air for Cu-O2/CeO, leading to its best water resistance among the three. This finding opens up possibilities for the development of highly efficient and water-resistant catalysts.