Detailed mechanistic studies on the ligand hydroxylation reaction mediated by a copper bis(imine) complex are presented. Starting from a structural analysis of the CuI complex and the CuII product with a hydroxylated ligand, the optical absorption and vibrational spectra of starting material and product are analyzed. Kinetic analysis of the ligand hydroxylation reaction shows that O2 binding is the rate-limiting step. The reaction proceeds much faster in methanol than in acetonitrile. Moreover, an inverse kinetic isotope effect (KIE) is evidenced for the reaction in acetonitrile, which is attributed to a sterically congested transition state leading to the peroxo adduct. In methanol, however, no KIE is observed. A DFT analysis of the oxygenation reaction mediated by the micro-eta2:eta2 peroxo core demonstrates that the major barrier after O2 binding corresponds to electrophilic attack on the arene ring. The relevant orbital interaction occurs between the sigma* orbital of the Cu2O2 unit and the HOMO of the ligand. On the basis of the activation energy for the rate-limiting step (18.3 kcal mol(-1)) this reaction is thermally allowed, in agreement with the experimental observation. The calculations also predict the presence of a stable dienone intermediate which, however, escaped experimental detection so far. Reasons for these findings are considered. The implications of the results for the mechanism of tyrosinase are discussed.