Density functional theory has been used to explore the mechanism of hydrogen peroxide decomposition when coordinated to a bispidone iron(II) complex. Two quite distinct pathways are identified, one involving O-O bond homolysis followed by a "rebound" hydrogen atom abstraction, the other involving proton transfer followed by O-O bond heterolysis. A water molecule in the second coordination sphere plays a key role in both pathways. © Wiley-VCH Verlag GmbH and Co. KGaA, 2007.