While diamagnetic transition metal complexes that bind and split H-2 have been extensively studied, paramagnetic complexes that exhibit this behavior remain rare. The square planar S = 1/2 Fe-I(P4N2)(+) cation (FeI+) reversibly binds H-2/D-2 in solution, exhibiting an inverse equilibrium isotope effect of K-H2/K-D2 = 0.58(4) at -5.0 degrees C. In the presence of excess H-2, the dihydrogen complex Fe-I(H-2)(+) cleaves H-2 at 25 degrees C in a net hydrogen atom transfer reaction, producing the dihydrogen-hydride trans-Fe-II(H)(H-2)(+). The proposed mechanism of H-2 splitting involves both intra- and intermolecular steps, resulting in a mixed first- and second-order rate law with respect to initial [FeI+]. The key intermediate is a paramagnetic dihydride complex, trans-Fe-III(H)(2+), whose weak Fe-III-H bond dissociation free energy (calculated BDFE = 44 kcal/mol) leads to bimetallic H-H homolysis, generating trans-Fe-II(H)(H-2)(+). Reaction kinetics, thermodynamics, electrochemistry, EPR spectroscopy, and DFT calculations support the proposed mechanism