The mechanism of the environmentally important reaction between permanganate anion and trichloroethene (TCE) has been studied theoretically using modern DFT functional. It has been shown that IEFPCM/M05-2X/aug-cc-pVDZ theory level yields activation parameters and carbon isotopic fractionation factor in excellent agreement with the experimental data. Obtained results indicate that this reaction proceeds via the 3+2 mechanism with a very early transition state, in which the new C-O bonds are formed only in about 20%. An alternative, stepwise mechanism that involves initial formation of a single new C-O bond and a C-Mn bond, followed by rearrangement to the permanganate-TCE adduct, has been found to be more energetically demanding and in disagreement with the experimental isotopic fractionation.