Bleomycins (BLMs) can utilize H2O2 to cleave DNA in the presence of ferric ions. DFT calculations were used to study the mechanism of O-O bond cleavage in the low-spin FeIII-hydroperoxo complex of BLM. The following alternative hypotheses were investigated using realistic structural models: (a) heterolytic cleavage of the O-O bond, generating a Compound I (Cpd I) like intermediate, formally BLM-FeV=O; (b) homolytic O-O cleavage, leading to a BLM-FeIV=O species and an OH* radical; and (c) a direct O-O cleavage/H-abstraction mechanism by ABLM. The calculations showed that (a) is a facile and viable mechanism; it involves acid-base proton reshuffle mediated by the side-chain linkers of BLM, causing thereby heterolytic cleavage of the O-O bond and generation of Cpd I. Formation of Cpd I is found to involve a barrier of 13.3 kcal/mol, which is lower than the barriers in the alternative mechanisms (b and c) that possess respective barriers of 31 and 17 kcal/mol. The so-formed Cpd I species with a radical on the side-chain linker, methylvalerate (V), adjacent to the BLM-FeIV=O complex, resembles the formation of the active species of cytochrome c peroxidase in the Poulos-Kraut proton-shuffle mechanism in heme peroxidases (Poulos, T. L.; Kraut, J. J. Biol. Chem. 1980, 255, 8199-8205). Experimental data are discussed and shown to be in accord with this proposal. It suggests that the high-valence Cpd I species of BLM participates in the DNA cleavage. This is an alternative mechanistic hypothesis to the exclusive reactivity scenario based on ABLM (FeIII-OOH).