We have studied CO adsorption on magnesia covered Co(0001) single crystal surfaces using XPS and TDS. Both molecular and dissociative adsorption were observed. The molecular adsorption is taking place on a clean Co(0001) surface and the dissociation is caused by MgOx/Co(0001). The CO dissociation increases the oxygen content of the MgOx overlayers producing MgO. Fully oxidized MgO blocks adsorption sites on the Co(0001) surface.