Magnetic circular dichroism (MCD) spectroscopy and variable-temperature variable-field MCD are used in combination with density functional theory (DFT) and time-dependent DFT (TD-DFT) calculations to characterize the so-called ox1-silent, red1, and ox1 forms of the Ni-containing cofactor F430 in methyl-coenzyme M reductase (MCR). Previous studies concluded that the ox1 state, which is the precursor of the key reactive red1 state of MCR, is a Ni(I) species that derives from one-electron reduction of the Ni(II)-containing ox1-silent state. However, our absorption and MCD data provide compelling evidence that ox1 is actually a Ni(II) species. In support of this proposal, our DFT and TD-DFT calculations indicate that addition of an electron to the ox1-silent state leads to formation of a hydrocorphin anion radical rather than a Ni(I) center. These results and biochemical evidence suggest that ox1 is more oxidized than red1, which prompted us to test a new model for ox1 in which the ox1-silent species is oxidized by one electron to form a thiyl radical derived from coenzyme M that couples antiferromagnetically to the Ni(II) ion. This alternative ox1 model, formally corresponding to a Ni(III)/thiolate resonance form but with predicted S = 1/2 EPR parameters reminiscent of a Ni(I) (3dx2-y2)1 species, rationalizes the requirement for reduction of ox1 to yield the red1 species and the seemingly incongruent EPR and electronic spectra of the ox1 state.