Bimetallic AgCu catalysts have gained considerable interest, as both metals have demonstrated ability to perform selective oxidation reactions. Many of these studies have shown increased selectivity arising from the combination of Ag and Cu, but the mode of selectivity enhancement for Cu in Ag remains unclear. The AgCu near-surface alloy provides a well-defined model system with which to study selective oxidation reactions. By using a combination of high-resolution scanning tunneling microscope imaging and temperature-programmed reaction studies, we demonstrate that the addition of a single monolayer of Ag to Cu increases the overall selectivity for the epoxidation of 1,3-butadiene to 3,4-epoxy-1-butene from ∼40% on Cu(111) to 100% on the complete monolayer. Specifically, the near-surface alloy undergoes dynamic restructuring that brings Cu atoms into the surface layer, which enhances oxygen dissociation on the Ag surface, but the Ag overlayer inhibits the formation of extended Cu oxide domains that also catalyze the combustion pathway. Together, these results indicate that high-surface-area catalysts comprised mostly of Ag with very small amounts of Cu may exhibit promising selective epoxidation chemistry.