Cypridina hilgendorfii (sea firefly) is a bioluminescent crustacean whose bioluminescence (BL) reaction is archetypal for a number of marine organisms, notably other bioluminescent crustaceans and coelenterates. Unraveling the mechanism of its BL is paramount for future applications of its strongly emissive lumophore. Cypridina produces light in a three-step reaction: First, the cypridinid luciferin is activated by an enzyme to produce a peroxide intermediate, cypridinid dioxetanone (CDO), which then decomposes to generate excited oxyluciferin (OxyCLnH*). Finally, OxyCLnH* deexcites to its ground state along with emission of bright blue light. Unfortunately, the detailed mechanism of the critical step, the thermolysis of CDO, remains unknown, and it is unclear whether the light emitter is generated from a neutral form (CDOH) or anionic form (CDO(-)) of the CDO precursor. In this work, we investigated the key step in the process by modeling the thermal decompositions of both CDOH and CDO(-). The calculated results indicate that the decomposition of CDO(-) occurs via the gradually reversible charge transfer (CT)-initiated luminescence (GRCTIL) mechanism, whereas CDOH decomposes through an entropic trapping mechanism without an obvious CT process. The thermolysis of CDO(-) is sensitive to solvent effects and is energetically favorable in polar environments compared with the thermolysis of CDOH. The thermolysis of CDO(-) produces the excited oxyluciferin anion (OxyCLn(-)*), which combines with a proton from the environment to form OxyCLnH*, the actual light emitter for the natural system.