The key stages of the dry oxidation of the SiC(0001) surface are analyzed based on first-principles calculations. It is found that an abrupt SiC/SiO2 interface model results in a large activation barrier of oxygen penetration to the silicon carbide, and thus the penetration is probably the rate-limiting step for the entire dry-oxidation process. The subsequent reactions of SiC oxidation after oxygen penetration are investigated, and it is found that CO release is competing with carbon dimer formation. These dimers probably are responsible for near-interface traps in the silica layer generated during SiC oxidation. The possible passivation reactions of a carbon dimer defect by active species, such as O2, NO, and H2 are investigated. It is found that an oxygen molecule can break a Si–C bond via dissociation in the triplet state and finally can produce two CO molecules from the carbon dimer defect. The NO molecule can easily break a Si–C bond of a carbon dimer defect and form cyano groups –CN, which can finally recombine to form a C2N2 molecule. This molecule can hardly diffuse in silica matrix, and it is suggested that it is further oxidized by an NO molecule to CO and N2 molecules. It is suggested that the process of passivation by O2 and NO molecules is restricted by the incorporation of these molecules in small voids near the carbon defect. Based on the calculated results, a simple kinetic mechanism of dry SiC oxidation is proposed and kinetic modeling of the oxidation process is performed. It is found that in the framework of this mechanism, the carbon defect density should weakly depend on temperature.