Cyanobacterial aldehyde-deformylating oxygenases (ADOs) belong to the ferritin-like diiron-carboxylate superfamily of dioxygen-activating proteins. They catalyze conversion of Cn fatty aldehydes to formate and the corresponding Cn-1 alk(a/e)nes. This unusual, apparently redox-neutral transformation actually requires four electrons per turnover to reduce the O2 co-substrate to the oxidation state of water and incorporates one O-atom from O2 into the formate co-product. We show here that the complex of the reduced form of ADO from Nostoc punctiforme (Np) with an aldehyde substrate reacts with O2 to form a colored intermediate with spectroscopic properties suggestive of a Fe2(III/III) complex with a bound peroxide. Its Mössbauer spectra reveal that the intermediate possesses an antiferromagnetically (AF) coupled Fe2(III/III) center with resolved sub-sites. The intermediate is long-lived in the absence of a reducing system, decaying slowly (t1/2 ~ 400 s at 5 °C) to produce a very modest yield of formate (< 0.15 enzyme equivalents), but reacts rapidly with the fully reduced form of 1-methoxy-5-methylphenazine ((MeO)PMS) to yield product, albeit at only ~ 50% of the maximum theoretical yield [owing to competition from unproductive pathway(s)]. The results represent the most definitive evidence to date that ADO uses a diiron cofactor (rather than a homo- or hetero-dinuclear cluster involving another transition metal) and provide support for a mechanism involving attack on the carbonyl of the bound substrate by the reduced O2 moiety to form a Fe2(III/III)-peroxyhemiacetal complex, which undergoes reductive O-O-bond cleavage, leading to C1-C2 radical fragmentation and formation of the alk(a/e)ne and formate products.