Using Scanning Tunneling Microscopy (STM) and Ambient Pressure X-ray Photoelectron Spectroscopy (APXPS), we investigated the structural evolution of Cu(111) interacting with oxygen in situ. O2 preferentially dissociates at Cu surface steps and oxidizes Cu, yielding “5-7”-Cu2O overlayers on surface steps, embedding oxides in adjacent terraces, and placing oxides on top of terraces. In response to continuous O2 exposure at 373 K, newly formed “5-7”-Cu2O films undergo successive transformations to “44”-Cu2O and “29”-Cu2O phases. Cuprous Cu-O overlayers are stable, even under high pressures (~1.6 mbar), at 473 K. First-principles Density Functional Theory (DFT) simulations substantiate experimental observations, resolving the energetics and structures of adsorption states and oxidation mechanisms at atomic scales. Specifically, the atomic dynamics responsible for overlayer growth from steps, selective oxidation of particular surface steps, and oxidation regime switching with overlayer coverage were all elucidated. Our combined STM, APXPS, and DFT studies extensively evaluate how Cu oxide overlayers dynamically form over various structural and reaction conditions.