The peroxide decomposition that generates the excited-state carbonyl compound is the key step in most organic chemiluminescence, and chemically initiated electron exchange luminescence (CIEEL) has been widely accepted for decades as the general mechanism for this decomposition. The firefly dioxetanone, which is a peroxide, is the intermediate in firefly bioluminescence, and its decomposition is the most important step leading to the emission of visible light by a firefly. However, the firefly dioxetanone decomposition mechanism has never been explored at a reliable theoretical level, because the decomposition process includes biradical, charge-transfer (CT) and several nearly degenerate states. Herein, we have investigated the thermolysis of firefly dioxetanone in its neutral (FDOH) and anionic (FDO-) forms using second-order multiconfigurational perturbation theories in combination with the ground-state intrinsic reaction coordinate calculated via the combined hybrid functional with Coulomb attenuated exchange-correlation, and considered the solvent effect on the ground-state reaction path using the combined hybrid functional with Coulomb attenuated exchange-correlation. The calculated results indicate that the chemiluminescent decomposition of FDOH or FDO- does not take place via the CIEEL mechanism. An entropic trap was found to lead to an excited-state carbonyl compound for FDOH, and a gradually reversible CT initiated luminescence (GRCTIL) was proposed as a new mechanism for the decomposition of FDO-.