The hybrid density functional method B3LYP was used to study the mechanism of the methane hydroxylation reaction catalyzed by the methane monooxygenase (MMO) enzyme. The key reactive compound Q of MMO was modeled by cis-(H2O)(NH2)Fe(μ-O)2(ν 2-HCOO)2 Fe(NH2)(H2O), I, where the substrate molecule may coordinate to the bridging oxygen atoms, O1 and O2, located on the H2O and NH2 sides, leading to two different mechanisms, O-side and N-side pathways, respectively. Previously we have detailed the N-side pathway (Basch, H.; Mogi, K.; Musaev, D. G.; Morokuma, K. J. Am. Chem. Soc. 1999, 121, 7249); here we discuss the O-side pathway, and compare the two. Calculations show that, like the N-side pathway, the O-side pathway of the reaction of I with CH4 proceeds via a bound-radical mechanism. It starts from the bis(μ-oxo) compound I and goes over the rate-determining transition state III_O for H abstraction from methane to . form a weak complex IV_O between the Fe(μ-O)(μ-OH)Fe moiety and a methyl radical. This bound-radical intermediate IV_O converts to the oxo-methanol complex VI_O via a low barrier at transition state V_O for the addition of the methyl radical to the μ-OH ligand. Complex VI_O easily (with about 7-8 kcal/mol barrier) eliminates the methanol molecule and produces the Fe(μ-O)Fe, VII_O, complex. During the entire process, the oxidation state of the Fe core changes from FeIV-FeIV in I to a mixed-valence FeIII-FeIV in the short-lived intermediate IV_O, and finally to FeIII-FeIII in VI_O and VII_O. A comparison of the O-side and N-side pathways shows that both include similar intermediates, transition states, and products. The rate-determining step of both pathways is the H-atom abstraction from the methane molecule, which occurs by 23.2 and 19.5 kcal/mol barrier for the O-side and N-side pathways, respectively, in the ground 9A states of the systems. Thus, the N-side pathway is intrinsically more favorable kinetically than the O-side pathway by about 4 kcal/mol. However, experimentally in the enzyme the N side is blocked by unfavorable steric hindrance and the actual reaction has to take place on the O side.