The 1,2-hydrogen shift in hydrogen peroxide (H2O2) to afford water oxide (H2OO) has been studied at the QCISD, QCISD(T), and CASSCF levels of theory with a 6-31G* basis set. These data support the contention that the MP4SDTQ/6-31G*//MP2/6-31G* level provides adequate geometries and activation barriers for 1,2-hydrogen shifts in peroxides. The 1,2-hydrogen shift in protonated hydrogen peroxide (H3O2+) has a barrier height of 32.5 kcal/mol at the MP4//MP2/6-31G** level. Activation barriers for the hydroxylation of methane, ethane, propane, butane, and isobutane at the MP4//MP2/6-31G* level of theory with perhydroxonium ion (H3O2+) affording the corresponding protonated alcohols are predicted to be 5.26, 0.16, -4.64, -4.74, and -4.98 kcal/mol, respectively, when computed relative to isolated reactants. A reactent cluster between hydroperoxonium ion and isobutane is stabilized by 7.15 kcal/mol relative to isolated reactants, and the barrier height for insertion of HO+ into isobutane is predicted to be 2.16 kcal/mol when computed from this gas phase reactant complex. This surprisingly low activation barrier is reduced to only 0.36 kcal/mol when zero-point energy corrections are included. The reaction trajectory for the approach of H3O2+ to the hydrocarbon and the transition state structure is predicted on the basis of a frontier molecular orbital model that determines the orientation of attack of an electrophilic reagent E(+) on a doubly occupied canonical fragment molecular orbital of the hydrocarbon.