PqqB from Methylobacterium extorquens is a unique nonheme iron-dependent hydroxylase involved in the biosynthesis of redox cofactor pyrroloquinoline quinone (PQQ). A series of recent experiments have demonstrated that PqqB catalyzes the stepwise insertions of two oxygen atoms into the tyrosine ring of the diamino acid substrate, generating the quinone moiety of PQQ; however, the reaction details have not been elucidated yet. In this paper, on the basis of the crystal structures, the enzyme− substrate complex models were constructed, and the catalytic mechanism of PqqB was explored by performing a series of combined QM/MM calculations. Our results confirmed that the first hydroxylation is performed by the highly reactive Fe IV -oxo species and follows the typical H-abstraction/hydroxyl rebound mechanism, which is similar to the common aliphatic hydroxylation catalyzed by the α-KG enzymes. Nevertheless, the second hydroxylation is achieved by the Fe-O 2 species, and the reactant complex can be described as an intermediate radical-Fe II -superoxide, that is, the dioxygen is activated by accepting an electron from the bidentate coordination intermediate. Since both the dioxygen and intermediate are activated by electron transfer, the distal oxygen of superoxide can directly attack the carbonyl carbon of substrate to form an alkylperoxo intermediate, then the O−O heterolysis occurs to afford the epoxide intermediate, which finally evolves into the product by rearrangement. It is the bidentate coordination of catechol moiety to iron that leads to the one-electron oxidation of the substrate by the dioxygen, which significantly activates the substrate and promotes the superoxide radical attack. During the catalysis, Asp90 and His240 in the second sphere play an important role by acting as acid−base catalysts to mediate the proton transfer and manipulate the suitable orientation of superoxide. These findings may provide useful information for understanding the unique reaction mechanism of PqqB that employs both the Fe IV -oxo and Fe II -superoxide to carry out the aromatic hydroxylation.