Cyanobacterial aldehyde-deformylating oxygenases (ADOs) belong to the ferritin-like diiron-carboxylate superfamily of dioxygen-activating proteins. They catalyze conversion of saturated or monounsaturated C-n fatty aldehydes to formate and the corresponding Cn-1 alkanes or alkenes, respectively. This unusual, apparently redox-neutral transformation actually requires four electrons per turnover to reduce the O-2 cosubstrate to the oxidation state of water and incorporates one O-atom from O-2 into the formate coproduct. We show here that the complex of the diiron(II/II) form of ADO from Nostoc punctiforme (Np) with an aldehyde substrate reacts with O-2 to form a colored intermediate with spectroscopic properties suggestive of a Fe-2(III/III) complex with a bound peroxide. Its Mossbauer spectra reveal that the intermediate possesses an antiferromagnetically (AF) coupled Fe-2(III/III) center with resolved subsites. The intermediate is long-lived in the absence of a reducing system, decaying slowly (t(1/2) similar to 400 s at 5 degrees C) to produce a very modest yield of formate (<0.15 enzyme equivalents), but reacts rapidly with the fully reduced form of 1-methoxy-5-methylphenazinium methylsulfate ((PMS)-P-MeO) to yield product, albeit at only similar to 50% of the maximum theoretical yield (owing to competition from one or more unproductive pathway). The results represent the most definitive evidence to date that ADO can use a diiron cofactor (rather than a homo- or heterodinuclear cluster involving another transition metal) and provide support for a mechanism involving attack on the carbonyl of the bound substrate by the reduced O-2 moiety to form a Fe-2(III/III)-peroxyhemiacetal complex, which undergoes reductive O-O-bond cleavage, leading to C1-C2 radical fragmentation and formation of the alk(a/e)ne and formate products.