Single atom catalysts (SACs) are highly desirable for the effort to maximize the efficiency of metal atom use. However, the synthesis of SACs is a major challenge that largely depends on finding an appropriate supporting substrate to achieve a well-defined and highly dispersed single atom. This work demonstrates that, based on the density functional theory (DFT) calculation, graphyne is a good substrate for single Fe atom catalysts. The Fe atom can be tightly embedded in a graphyne sheet with a high binding energy of ∼4.99 eV and a high diffusion energy barrier of ∼1.0 eV. The graphyne-supported Fe (Fe-graphyne) SAC shows high catalytic activity towards CO oxidation, which is often regarded as a prototype reaction for designing atomic-scale catalysts. We studied the adsorption characteristics of CO and O2 on Fe-graphyne SACs, and simulated the reaction mechanism of CO oxidation involving Fe-graphyne. The simulation results indicate that O2 binding on Fe-graphyne is much stronger than that of CO, and the adsorbed O2 prior to occupy the Fe atoms as the co-existence of O2 and CO. The reaction of CO oxidation by adsorbed O2 on Fe-graphyne SACs favors to proceed via the Eley-Rideal (ER) mechanism with the energy barrier of as low as ∼0.21 eV in the rate-limiting step. Calculation of the electronic density of states (DOS) of each reaction step demonstrates that the strong interaction of the O2 and Fe adatom promotes the CO oxidation on Fe-graphyne SACs. The results presented here suggest that graphyne could provide a unique platform to synthesize SACs, and the Fe-graphyne SACs could find potential use in solving the growing environmental problems caused by CO emission from automobiles and industrial processes, in removing CO contamination from vehicle exhaust and in fuel cells.