The combination of density functional theory (DFT) calculations and kinetic analyses is a very useful approach to study surface reactions in heterogeneous catalysis. The present paper reviews some recent work applying this approach to Fischer-Tropsch (FT) synthesis. Emphasis is placed on the following fundamental issues in FT synthesis: (i) reactive sites for both hydrogenation and C-C coupling reactions; (ii) reaction mechanisms including carbene mechanism, CO-insertion mechanism and hydroxyl-carbene mechanism; (iii) selectivity with a focus on CH4 selectivity, alpha-olefin selectivity and chain growth probability; and (iv) activity.