Chlorite dismutase (Cld) is a crucial enzyme that catalyzes the decomposition of chlorite ions into chloride ions (Cl − ) and molecular oxygen (O 2 ). Despite playing an important role in the detoxification of toxic chlorite ions, the mechanism of cleavage of the Cl−O bond by Cld remains highly debatable. The present study highlights the mechanism of such Cl−O bond cleavage in Cld using sophisticated computational tools such as hybrid quantum mechanical/molecular mechanical calculations and long-time scale molecular dynamics simulations. Here, we show that Cld forms a high spin ferric hexacoordinated substrate adduct in the presence of a chlorite ion, which subsequently reduces to a ferrous state. Our study shows a stepwise pathway with the homolytic cleavage of the Cl−O bond that produces a high spin Fe(III)−OH species and a diradicaloid species formed by the combination of a chlorine-based ClO • radical and a protein-based tyrosine118 • radical. The findings provide significant insights into Cl−O bond cleavage and O 2 formation which shows a crucial role of the tyrosine118 during the electron transfer process.