We propose a new DFT-based mechanism for methane production using the full F-430 cofactor of MCR (methyl-coenzyme M reductase) along with a coordinated O=CH2CH2C(H)NH2CH)O (surrogate for glutamine) as a model of the active site for conversion of CH3SCOM- (CH3SCH2CH2SO3-) + HSCoB to methane plus the corresponding heterodisulfide. The cycle begins with the protonation of F-430, either on Ni or on the C-ring nitrogen of the tetrapyrrole ring, both of which are nearly equally favorable. The C-ring protonated form is predicted to oxidatively add CH3SCOM- to give a 4-coordinate Ni center where the Ni moves out of the plane of the four ring nitrogens. The movement of Ni (and the attached CH3 and SCH2CH2SO32- ligands) toward the SCoB- (deprotonated HSCoB) cofactor allows a 2c-3e interaction to form between the two sulfur atoms. The release of the heterodisulfide yields a Ni(III) center with a methyl group attached. The concerted elimination of methane, where the methyl group coordinated to Ni abstracts the proton from the C-ring nitrogen, has a very small calculated activation barrier (5.4 kcal/mol). The NPA charge on Ni for the various reaction steps indicates that the oxidation state changes occur largely on the attached ligands.