To further clarify the influence mechanism of the hydroxyl group on NO heterogeneous reduction over char, this study demonstrates that the hydroxyl group affects the NO reduction over char through two different pathways based on density functional theory (DFT). For the first pathway, termed “Adsorption-only”, the hydroxyl group merely adsorbs onto the char surface as a surface functional group. Conversely, for the second pathway, termed “Modification”, the hydroxyl group engages in reactions with the char, inducing a redistribution of active sites on the char surface. Kinetics calculations reveal that the “Adsorption-only” pathway inhibits NO heterogeneous reduction over char, while the “Modification” pathway substantially enhances the reduction process. From the standpoint of the reaction pathway, the “Modification” mechanism shortens the reduction reaction pathway. Additionally, wave function analysis shows that this mechanism involves Coulomb attraction during bond formation and Coulomb repulsion during bond breaking, potentially lowering the energy barrier.