The direct epoxidation of propylene on Ag(111) under different oxygen coverage conditions was systemically studied on the basis of density functional theory calculation and the general trends of oxygen coverage on the two parallel competitive reaction paths in propylene oxide (PO) formation: α-H stripping versus epoxidation and the generation of PO versus acetone (AC) were explored. Then, the PO formation selectivity was investigated. Results showed that increase in oxygen coverage enhanced the adsorption strength of adsorbed species, except the O* species. In the primary reaction of propylene epoxidation, high oxygen coverage facilitates the first α-H stripping process, and opposite trend was observed in epoxidation process. As for the secondary chemistry in propylene epoxidation, increase in oxygen coverage benefits PO and AC formation. The coverage of O* has considerable influences on the primary reaction but small influence on the secondary reaction. Although a high oxygen coverage benefits the first α-H stripping, the second α-H stripping has higher barrier than that in secondary chemistry, and thus the PO formation would be better than that of acrolein formation at higher oxygen coverage.