The effect of H2O reactivity on CH4 oxidation in O-2/H2O combustion was studied using the reactive molecular dynamics (ReaxFF-MD) method. Simulations were performed under fuel-rich, stoichiometric, and fuel-lean conditions at the temperature 2400-3600 K with a high concentration of H2O. The results obtained under fuel-rich conditions showed that replacing N-2 gas with H2O inhibited the oxidation rate of CH4 at low temperatures due to equilibrium reasons and the third body efficiency of H2O. However, the presence of H2O advanced the oxidation of CH4 because of H2O reactivity at high temperatures. The amount of OH radicals and H-2 molecules in fuel-rich O-2/H2O combustion was obviously greater than that in O2/N-2 combustion, which proved that H2O molecules mainly take part in the reactions through H2O + H -> H-2 OH and H2O + O -> OH + OH. The activity of OH radicals is higher than that of H radicals in CH4 oxidation. Therefore, a high concentration of H2O promoted the reaction rate of CH4 at high temperatures. Methyl and formaldehyde molecules (CH3 and CH2O) were found to be important intermediates during CH4 combustion. In O-2/H2O environment, CH3 was consumed more rapidly than in O-2/N-2 environment, and the amount of CH2O was larger at the maximum value. This indicated that the effect of H2O promoted the consumption of hydrocarbon radicals, leading to intermediates CH2O generation. CO + OH > CO2 + H is the main reaction, leading CO consuming, which is promoted in O-2/H2O combustion due to the presence of a large amount of OH radicals. Therefore, the reactivity of H2O reduced the CO/CO2 ratio by converting CO to CO2. The effect of Oy concentration on CH4 combustion in O-2/H2O was also studied. With O-2 concentration increasing, the reaction rate of CH4 was promoted. In addition, CO and H-2 molecules were further converted to CO2 and H2O, respectively.