The depth of our understanding in catalysis is governed by the information we have about the number of active sites and their molecular structure. The nature of an active center on the surface of a working heterogeneous catalyst is, however, extremely difficult to identify and precise quantification of active species is generally missing. In metathesis of propene over dispersed molybdenum oxide supported on silica, only 1.5% of all Mo atoms in the catalyst are captured to form the active centers. Here we combine infrared spectroscopy in operando with microcalorimetry and reactivity studies using isotopic labeling to monitor catalyst formation. We show that the active Mo(VI)-alkylidene moieties are generated in situ by surface reaction of grafted molybdenum oxide precursor species with the substrate molecule itself gaining insight into the pathways limiting the number of active centers on the surface of a heterogeneous catalyst. The active site formation involves sequential steps requiring multiple catalyst functions: protonation of propene to surface Mo(VI)-isopropoxide species driven by surface Brønsted acid sites, subsequent oxidation of isopropoxide to acetone in the adsorbed state owing to the red-ox capability of molybdenum leaving naked Mo(IV) sites after desorption of acetone, and oxidative addition of another propene molecule yielding finally the active Mo(VI)-alkylidene species. This view is quite different from the one-step mechanism, which has been accepted in the community for three decades, however, fully consistent with the empirically recognized importance of acidity, reducibility, and strict dehydration of the catalyst. The knowledge acquired in the present work has been successfully implemented for catalyst improvement. Simple heat treatment after the initial propene adsorption doubled the catalytic activity by accelerating the oxidation and desorption-capturing steps, demonstrating the merit of knowledge-based strategies in heterogeneous catalysis. Molecular structure of active Mo(VI)-alkylidene sites derived from surface molybdena is discussed in the context of similarity to the highly active Schrock-type homogeneous catalysts.