Density functional theory (DFT) is applied to the dark section of the catalytic cycle of the enzyme cytochrome P450, namely, the formation of the active species, Compound I (Cpd I), from the ferric-hydroperoxide species (Cpd 0) by a protonation-assisted mechanism. The chosen 96-atorn model includes the key functionalities deduced from experiment: Asp(251), Thr(252), Glu(366), and the water channels that relay the protons. The DFT model calculations show that (a) Cpd I is not formed spontaneously from Cpd 0 by direct protonation, nor is the process very exothermic. The process is virtually thermoneutral and involves a significant barrier such that formation of Cpd I is not facile on this route. (b) Along the protonation pathway, there exists an intermediate, a protonated Cpd 0, which is a potent oxidant since it is a ferric complex of water oxide. Preliminary quantum mechanical/molecular mechanical calculations confirm that Cpd 0 and Cpd I are of similar energy for the chosen model and that protonated Cpd 0 may exist as an unstable intermediate. The paper also addresses the essential role of Thr(252) as a hydrogen-bond acceptor (in accord with mutation studies of the OH group to OMe).