A model C-(4a)-flavinhydroperoxide (FIHOOH) is described that contains the tricyclic isoalloxazine moiety, the C-4a-hydroperoxide functionality, and a beta-hydroxyethyl group to model the effect of the 2'-OH group of the ribityl side chain of native FADHOOH. The electronic structures of this reduced flavin (H(3)Fl(red)), its N1 anion (H(2)Fl(red)(-)), oxidized flavin (HFl(ox)), and FIHOOH have been fully optimized at the B3LYP/6-31+G(d,p) level of theory. This model C-4a-flavinhydroperoxide is used to describe the transition state for the key step in the paradigm aromatic hydroxylase, p-hydroxybenzoate hydroxylase (PHBH): the oxidation of p-hydroxybenzoate (p-OHB). The Tyrosine-201 residue in PHBH is modeled by phenol, and Arginine-214 is modeled by guanidine. Electrophilic aromatic substitution proceeds by an S(N)2-like attack of the aromatic sextet of p-OHB phenolate anion on the distal oxygen of FIHOOH 3. The transition structure for oxygen atom transfer is fully optimized [B3LYP/6-31 +G(d,p)] and has a classical activation barrier of 24.9 kcal/mol. These data suggest that the role of the Tyr-201 is to orient the p-OHB substrate and to properly align it for the oxygen transfer step. Although the negatively charged phenolate oxygen does activate the C-3 carbon of p-OHB phenolate anion toward oxidation relative to ortho oxidation of the carboxylate anion, it appears that H-bonding the Tyr-201 residue to this phenolic oxygen stabilizes both the ground state (GS) and the transition state (TS) approximately equally and therefore plays only a minor role, if any, in lowering the activation barrier. Complexation of p-OHB with guanidine has only a modest effect upon the oxidation barriers. When the complex is in the form of a salt-bridge (10a), the barrier is only slightly reduced. When the TSs are placed in THF solvent (COSMO) with full geometry optimization, salt-bridge TS-A is slightly favored (DeltaDeltaE(double dagger) = 2.3 kcal/mol).