The mechanism of action of the enzyme diol dehydrase has variously been suggested to involve a radical, a protonated radical (radical cation), or a carbocation in the apparent transfer of HO from one carbon atom to the other to give acetaldehyde and water. This adenosylcobalamin-requiring B-12 enzyme catalyzes dehydration of 1,2-dihydroxyethane. Its active site is buried within a hydrophobic cavity. Each of the three possibilities are examined by ab initio molecular orbital calculations. Total molecular energies have been calculated with full geometry optimization at the MP2(FC)/6-31G* level and, in addition, single point energies using the MP2(FC)/6-311++G** basis set. Vibrational frequencies were also calculated. Transfer of an HO group within a HOCH-CH2OH inverted left perpendicular (.) radical (postulated to be formed by the initial reaction of the diol with the deoxyadenosyl radical via a bridge structure) was ruled out because the activation energy is much too high in relation to the observed rate constant for the enzyme reaction. A carbocation mechanism also presents problem, quite apart from the necessity of postulating some acceptor for the electron from the HOCH-CH2OH inverted left perpendicular (.) radical. In principle acetafdehyde could be formed via the 2,2-dihydroxyeth-1-yl cation which was found to undergo a spontaneous 1,2-hydride ion shift, giving protonated acetic acid. But, although the 1,2-dihydroxyethyl cation (otherwise protonated glycolaldehyde) is well established as a stable species, the intermediary bridge structure could not be found. The radical cation HOCH-CH2OH2 inverted left perpendicular (.+), formed by proton transfer from an active-site group, was found to be inherently unstable, transforming without activation into a stable hydrogen-bonded hydrate of the anti-vinyl alcohol radical cation, H2O ... CH2 inverted left perpendicular (.+). Deprotonation and H-atom transfer (from AdCH(3)) were then found to give stable hydrogen-bonded hydrates of the formylmethyl radical, protonated acetaldehyde, and acetaldehydeitself. The ultimate formation of acetaIdehyde and water can be attributed either to the dissociation of acetaldehyde hydrate or the prior dissociation of theformylmethyl radical hydrate followed by the H-atom transfer step. Because H2O is already formed as a discrete entity in the initial protonation step and no transfer of a bonded HO, H2O,-or H2O+ group from one carbon atom to the other actually occurs, this series of reactions may be termed a "predissociation" mechanism. The overall proton transfer and the formation of water are complicated interconnected processes. A consideration of whether or not the cobalt participates in one of the later reaction steps is undenvay.