Density functional theory has been used to investigate the structural, electronic, and reactivity properties of an established functional model for vanadium‐dependent haloperoxidases, K[VO(O2)Hheida] (Hheida2– = 2,2′‐[(2‐hydroxyethyl)imino]diacetate). Possible solution species were determined on the basis of potential exogenous donors present under the conditions necessary for reactivity. The energetically favored solution‐state species is a 1:1 complex of Hheida and vanadium with a coordinated hydroxyethyl donor trans to the vanadium–oxido bond which is in agreement with the reported solid‐state structure for K[VO(O2)Hheida]. Transition states of the oxidation reaction were located for four substrates: chloride, bromide, iodide, and dimethyl sulfide. The role of protonation and its effects on reactivity were examined for each substrate. Protonation of the peroxido moiety leads to a significant drop in the activation barrier for oxidation. In contrast no transition states could be located for an oxido‐transfer process involving the oxido ligand. Barriers of activation calculated for halide oxidation were similar, providing support to the hypothesis that the pKa of the halide in acetonitrile is responsible for the decrease in reactivity between I–, Br–, and Cl–. The results presented herein provide a mechanistic correlation between a functional model and the enzyme, making K[VO(O2)Hheida] a “complete” functional model for vanadium‐dependent haloperoxidase.(© Wiley‐VCH Verlag GmbH & Co. KGaA, 69451 Weinheim, Germany, 2007)