Bismuth oxyiodide (BiOI) is a traditional layered oxide photocatalyst that performs in a wide visible-light absorption band, owing to its appropriate band structure. Nevertheless, its photocatalytic efficiency is immensely inhibited due to the serious recombination of photogenerated charge carriers. Herein, this great challenge is addressed via a new strategy of intralayer modification by -OH groups in BiOI, which leads to enhancement of the reactants' activation capacity to promote photocatalytic activity and generate more active species. Furthermore, analysis via a combination of experimental and theoretical methods revealed that the -OH group-functionalized samples reduce the energy barriers for conversion of the main intermediate (NO2), which is easily transformed to NO2-, thus accelerating the oxidation of NO to the final product (NO3-). This study gives insight into NO oxidation, improving the photocatalytic efficiency, and mastering the photocatalysis reaction mechanism to curb air pollution.