Regenerable flue gas desulfurization (FGD) is highly attractive because of the transformation of sulfur dioxide (SO2) to high-value products. In this study, selenium-assisted SO2 reduction by carbon monoxide (CO) in the liquid phase [dimethylformamide (DMF) + water (H2O) mixture] is proposed and applied in the FGD process. This process realizes recycle of the elemental sulfur product under room temperature. Moreover, results show that both the selenium catalyst and DMF solvent have good stability and can be well recycled, implying that this process is economically feasible. Furthermore, the mechanism of selenium-assisted SO2 reduction by CO in DMF/H2O is investigated. Results show that the selenium catalyst dissolves in solution and forms Se-n(2-) species, which are the active intermediates and promote formation of the sulfur product.