AlkB is a bacterial enzyme that catalyzes the dealkylation of alkylated DNA bases. The rate-limiting step is known to be the abstraction of an H atom from the alkyl group on the damaged base by a Fe-IV-oxo species in the active site. We have used hybrid ab initio quantum mechanical/molecular mechanical methods to study this step in AlkB. Instead of forming an Fe-III-oxyl radical from Fe-IV-oxo near the C-H activation transition state, the reactant is found to be an Fe-III-oxyl with an intermediate-spin Fe (S = 3/2) ferromagnetically coupled to the oxyl radical, which we explore in detail using molecular orbital and quantum topological analyses. The minimum energy pathway remains on the quintet surface, but there is a transition between Fe-IS(III)-oxyl and the state with a high-spin Fe (S = 5/2) antiferromagnetically coupled to the oxyl radical. These findings provide clarity for the evolution of the well-known pi and sigma channels on the quintet surface in the enzyme environment. Additionally, an energy decomposition analysis reveals nine catalytically important residues for the C-H activation step, some of which are conserved in two human homologues. These conserved residues are proposed as targets for experimental mutagenesis studies.