A realistic atomistic model is used to assess spatiotemporal behavior in nanoscale CO oxidation systems at higher pressures than for traditional ultrahigh vacuum studies. The strong influence of adspecies interactions in this regime of high reactant coverages leads to phase separation between oxygen-rich and CO-rich reactive states. Time-series studies reveal fluctuation-induced transitions between these states, as well as transitions between reactive and inactive states. In addition, we observe flickering spatial patterns with sharp boundaries.