The electrochemical reaction in the cathode plays an important role on the performance and application of PEM fuel cell. In this paper, mechanism of oxygen reduction reaction in the cathode of PEM fuel cell is simulated based on molecule dynamics and quantum mechanics. The most probable electrochemical reaction process in the cathode is obtained by analyzing transition state and free energy of oxygen reduction reaction with the catalysis of Pt. Simulation results show that 2e reaction mechanism is more applicable to oxygen reduction reaction in the cathode than 4e reaction mechanism; according to the potential energy barrier, the process from hydrogen peroxide to water is the controlling process of oxygen reduction; comparison with the total free energy, when the fuel cell temperature is 353K, the thermodynamics potential of PEM fuel cell is the highest. Simulation results are very helpful to understanding reaction mechanism in the cathode of PEM fuel cell and optimizing its performance.