A quantum mechanics/molecular mechanics study of the resting state of the vanadium dependent chloroperoxidase from fungi Curvularia inaequalis and of the early intermediates of the halide oxidation is reported. The investigation of different protonation states indicates that the enzyme likely consists of an anionic H2VO4- vanadate moiety where one hydroxo group is in axial position. The calculations suggest that the hydrogen peroxide binding may not involve an initial protonation of the vanadate cofactor. A low free energy reactive path is found where the hydrogen peroxide directly attacks the axial hydroxo group, resulting in the formation of an hydrogen peroxide intermediate. This intermediate is promptly protonated to yield a peroxo species. The free energy barrier for the formation of the peroxo species does not depend significantly upon the protonation state of the cofactor. The most likely protonation states of the peroxo cofactor are neutral forms HVO2(O-2) with a hydroxo group either H-bonded to Ser(402) or coordinated to Arg(360). The peroxo cofactor is also coordinated to an axial water molecule, which could be important for the stability of the peroxovana.date/His(496) adduct. Our calculations strongly suggest that the halide oxidation may take place with the preliminary formation of a peroxovanadate/halogen adduct. Subsequently, the halogen reacts with the peroxo moiety yielding a hypohalogen vanadate. The most reactive protonation state of peroxovanadate is the neutral HVO2(O-2) with the hydroxo group H-bonded to Ser(402). The important role of Lys(353) in determining the catalytic activity is also confirmed.