Laccase is a multicopper oxidase that contains four Cu ions, one type 1, one type 2, and a coupled binuclear type 3 Cu pair. The type 2 and type 3 centers form a trinuclear Cu cluster that is the active site for O-2 reduction to H2O. To examine the reaction between the type 2/type 3 trinuclear cluster and dioxygen, the type 1 Cu was removed and replaced with Hg2+, producing the T1Hg derivative. When reduced T1Hg laccase is reacted with dioxygen, a peroxide intermediate (P) is formed. The present study examines the kinetics and mechanism of formation and decay of P in T1HgLc. The formation of P was found to be independent of pH and did not involve a kinetic solvent isotope effect, indicating that no proton is involved in the rate-determining step of formation of P. Alternatively, pH and isotope studies on the decay of P revealed that a proton enhances the rate of decay by 10-fold at low pH. This process shows an inverse k(H)/k(D) kinetic solvent isotope effect and involves protonation of a nearby residue that assists in catalysis, rather than direct protonation of the peroxide. Decay of P also involves a significant oxygen isotope effect (k(16)O(2)/k(18)O(2)) Of 1.11 +/-0.05, indicating that reductive cleavage of the O-O bond is the rate-determining step in the decay of P. The activation energy for this process was found to be similar to9.0 kcal/mol. The exceptionally slow rate of decay of P is explained by the fact that this process involves a le(-) reductive cleavage of the O-O bond and there is a large Franck-Condon barrier associated with this process. Alternatively, the 2e(-) reductive cleavage of the O-O bond has a much larger driving force which minimizes this barrier and accelerates the rate of this reaction by similar to 10(7) in the native enzyme. This large difference in rate for the 2e-versus le- process supports a molecular mechanism for multicopper oxidases in which O-2 is reduced to H2O in two 2e(-) steps.