A detailed mechanistic study of arene C-H activation in CH2Cl2 solution by Cp*(L)IrMe(X) [L = PMe3, P(OMe)(3); X = OTf, (CH2Cl2)BArf; (BArf = B[3,5-C6H3(CF3)(2)](4))(-)] is presented. It was determined that triflate dissociation in Cp*(L)IrMe(OTf), to generate tight and/or solvent-separated ion pairs containing a cationic iridium complex, precedes C-H activation. Consistent with the ion-pair hypothesis, the rate of arene activation by Cp*(L)IrMe(OTf) is unaffected by added external triflate salts, but the rate is strongly dependent upon the medium. Thus the reactivity of Cp*(PMe3)IrMe(OTf) can be increased by almost 3 orders of magnitude by addition of (n-Hex)(4)NBArf, presumably because the added BArf anion exchanges with the OTf anion in the initially formed ion pair, transiently forming a cation/borate ion pair in solution (special salt effect). In contrast, addition of (n-Hex)(4)NBArf to [Cp*PMe3Ir(Me)CH2Cl2][BArf] does not affect the rate of benzene activation; here there is no initial covalent/ionic preequilibrium that can be perturbed with added (n-Hex)(4)NBArf. An analysis of the reaction between Cp*(PMe3)IrMe(OTf) and various substituted arenes demonstrated that electron-donating substituents on the arene increase the rate of the C-H activation reaction. The rate of C6H6 activation by [Cp*(PMe3)Ir(Me)CH2Cl2][BArf] is substantially faster than [Cp*-(P(OMe)(3))Ir(Me)CH2Cl2][BArf]. Density functional theory computations suggest that this is due to a less favorable preequilibrium for dissociation of the dichloromethane ligand in the trimethyl phosphite complex, rather than to a large electronic effect on the C-H oxidative addition transition state. Because of these combined effects, the overall rate of arene activation is increased by electron-donating substituents on both the substrate and the iridium complex.