We present a method for performing density-functional theory (DFT) calculations in which one or more Kohn-Sham orbitals are constrained to be localized on individual atoms. This constrained-orbital DFT (CO-DFT) approach can be used to tackle two prevalent shortcomings of DFT: the lack of transparency with regard to the governing electronic structure in large (planewave based) DFT calculations and the limitations of semilocal DFT in describing systems with localized electrons or a large degree of static correlation. CO-DFT helps to address the first of these issues by decomposing complex orbital transformations occurring during elementary chemical processes into simpler and more intuitive transformations. The second issue is addressed by using the CO-DFT method to generate configuration states for multiconfiguration Kohn-Sham calculations. We demonstrate both of these applications for elementary reaction steps involved in the oxygen evolution reaction.