The structure and stabilities of various intermediates of the "water-assisted" O-O bond activation reaction on the MMOHred and R2(red) were studied using the B3LYP hybrid density functional method, and are compared with those for the "water-free" model studies. It was shown that the first Step of the reaction is coordination of the O-2 molecule to one of the Fe atoms of complex I_H2O ("water-assisted" model complex) leading to formation of the mixed-valence superoxo species, [Fe-II(O-2)Fe--(III)], II_H2O. Then, the second electron transfer from the other Fe atom to the O-2 moiety leads to formation of the peroxo complex [Fe-III(O-2)Fe-2-(III)], which is found to have four different isomers, III_H2O, IV_H2O, V_H2O, and VI_H2O, corresponding to the cis-mu -1,2, end-on mu -1,1, distorted trans mu -1,2, and mu-eta (2)-eta (2) coordination modes of O-2, respectively. The stability (relative to I_H2O + O-2) of these isomers increases via III_H2O (34.5 kcal/mol) < VI_H2O (36.4 kcal/mol) < V_H2O (44.7 kcal/mol) < IV_H2O (57.4 kcal/mol). On the basis of the structural analysis and calculated O-O bond distances, we have predicted that isomers III_H2O, V_H2O, and VI_H2O are intermediates on the, potential energy surface of the homolytic O-O activation process, while isomers III_H2O and IV_H2O are intermediates of the heterolytic O-O activation reaction. The homolytic O-O activation by MMOHred is predicted to occur via the following intermediates: I_H2O + O-2 + II_H2O (superoxo species) --> III_H2O (cis-mu -1,2-peroxo)--> V_H2O (distorted trans-mu -1,2-peroxo) --> VI_H2O (mu-eta (2)-eta (2) phoxo) --> VII_H2O (compound Q with water) --> VII (compound Q). Having an additional water molecule around the active site of MMOHred (and R2(red)) facilitates the superoxo --> peroxo conversion process because of the opening of one of the "legs" of mu -1,2-bridged carboxylate leading to formation of Fe-1-HOH...OCHO-Fe-2 network.