Recently it was discovered that the iron coordination complex (LFe)-Fe-N4(II)(OTf)(2) (I) (L-N4 = neutral tetraazadendate ligand and OTf = OSO2CF3) and its analogues are efficient water oxidizing catalysts (WOCs) in aqueous acidic solution with excess amount of ceric(IV) ammonium nitrate (CAN), [Ce(IV)(NO3)(6)](NH4)(2), as sacrificial oxidants. The probable mechanism of water oxidation by these catalysts was explored on the basis of density functional theory (DFT) and time-dependent DFT (TD-DFT) calculations for 1 as a representative WOC. We examined the conversion of 1 to the resting intermediate [(LFe)-Fe-N4(IV)(O)(OH2)](2+) [2(IV)] as well as two catalytic cycles involving 2(IV): one proposed by Fillol et al. [Nat. Chem. 2011, 3, 1] in which the Fe oxidation states of the intermediate species vary from +2 to +5, and the alternative cycle in which they remain constant at +4. In addition, we investigated the role of the sacrificial oxidant CAN in driving the catalytic cycle. Our DFT and TD-DFT calculations confirm the experimental observation that 2(IV) is the resting species, and indicate that the catalytic cycle in which the Fe oxidation states of the intermediate species remain at +4 is energetically more favorable.