We study the generation of a dinuclear Fe(IV)oxo species, [EDTAH·FeO·OFe·EDTAH](2-), in aqueous solution at room temperature using Density Functional Theory (DFT) and Ab Initio Molecular Dynamics (AIMD). This species has been postulated as an intermediate in the multi-step mechanism of autoxidation of Fe(II) to Fe(III) in the presence of atmospheric O(2) and EDTA ligand in water. We examine the formation of [EDTAH·FeO·OFe·EDTAH](2-) by direct cleavage of O(2), and the effects of solvation on the spin state and O-O cleavage barrier. We also study the reactivity of the resulting dinuclear Fe(IV)oxo system in CH(4) hydroxylation, and its tendency to decompose to mononuclear Fe(IV)oxo species. The presence of the solvent is shown to play a crucial role, determining important changes in all these processes compared to the gas phase. We show that, in water solution, [EDTAH·FeO·OFe·EDTAH](2-) (as well as its precursor [EDTAH·Fe·O(2)·Fe·EDTAH](2-)) exists as stable species in a S = 4 ground spin state when hydrogen-bonded to a single water molecule. Its structure comprises two facing Fe(IV)oxo groups, in an arrangement similar to the one evinced for the active centre of intermediate Q of soluble Methane Monooxygenase (sMMO). The inclusion of the water molecule in the complex decreases the overall symmetry of the system, and brings about important changes in the energy and spatial distribution of orbitals of the Fe(IV)oxo groups relative to the gas phase. In particular, the virtual 3σ* orbital of one of the Fe(IV)oxo groups experiences much reduced repulsive orbital interactions from ligand orbitals, and its consequent stabilisation dramatically enhances the electrophilic character of the complex, compared to the symmetrical non-hydrated species, and its ability to act as an acceptor of a H atom from the CH(4) substrate. The computed free energy barrier for H abstraction is 28.2 kJ mol(-1) (at the BLYP level of DFT), considerably below the gas phase value for monomeric [FeO·EDTAH](-), and much below the solution value for the prototype hydrated ferryl ion [FeO(H(2)O)(5)](2+).