Volatile organic compounds (VOCs) emitted from coal-fired flue gas of thermal power plants have reached unprecedented levels due to lack of understanding of reaction mechanisms under industrial settings. Herein, inhibition mechanisms for catalytic oxidation of o-xylene in simulated coal-fired flue gas are elucidated with in-situ and ex-situ spectroscopic techniques considering the presence of impurity components (NO, NH3, SO2, H2O). MnCe oxide catalysts prepared at Mn: Ce mass ratios of 6:4 are demonstrated to promote 87% o-xylene oxidation at 250 °C under gas hourly space velocities of 60,000 h−1. Reaction intermediates on the catalyst surface are revealed to be o-benzoquinones, benzoates, and formate and they were stably formed under O2/N2 atmospheres. When either NO or NH3 was introduced into the simulated flue gas, the formed species shifted toward formate in minutes, which indicated that changes in catalyst surface chemistry are directly related to impurity components. Presence of NH3 in the simulated flue gas inhibited o-xylene oxidation by reducing Mn and lowering Brønsted acidity of the catalyst. Impurity components associated with pollutant removal processes (Hg0 oxidation and selective catalytic reduction of NO) lowered o-xylene removal efficiency. Presence of o-xylene in the flue gas had little effect on the efficiency of pollutant removal processes. Layered catalytic beds located downstream from Hg0/NO pollutant removal processes are proposed to lower VOC emissions from coal-fired flue gases of thermal power plants in industrial settings.