Four-membered ring peroxides are intimately linked to chemiluminescence and bioluminescence transformations, as high-energy intermediates responsible for electronically excited-state formation. The synthesis of 1,2-dioxetanes and 1,2-dioxetanones enabled mechanistic studies on their decomposition occurring with the formation of electronically excited carbonyl products in the singlet or triplet state. The third member of this family, 1,2-dioxetanedione, has been postulated as the intermediate in the peroxyoxalate reaction, recently confirmed by kinetic studies on peroxalic acid derivatives. Several general chemiexcitation mechanisms have been proposed as model systems for the chemiexcitation step in efficient bioluminescence and chemiluminescence transformations. In this review article, we discuss the validity and efficiency of the most important chemiexcitation mechanisms, extended to aqueous media, where the efficiency is known to be drastically reduced, specifically in the peroxyoxalate reaction, highly efficient in anhydrous environment, but much less efficient in aqueous media. Mechanistic studies of this reaction will be discussed in diverse aqueous environments, with special attention to the catalysis involved in the thermal reaction leading to the formation of the high-energy intermediate and to the chemiexcitation mechanism, as well as emission quantum yields. Finally, several recent analytical and bioanalytical applications of the peroxyoxalate reaction in aqueous media will be given.