Density functional calculations are used to revisit the reaction mechanism of water oxidation catalyzed by the Cp*Ir(bpy)Cl (Cp* = pentamethylcyclopentadienyl, bpy = 2,2'-bipyridine) complex. One of the experimentally suggested active species [(bpy)Ir(H2O)(2)(HCOO)Cl](+) can undergo very facile intramolecular formate oxidation at higher oxidation state even though it can also promote OO bond formation. Therefore, [(bpy)Ir(H2O)(2)(CH3COO)Cl](+) is here proposed to be the most likely precatalyst as acetate was also experimentally observed after Cp* oxidation. OO bond formation takes place at the high formal oxidation states of IrVI and IrVII, rather than that of IrV, as suggested before. Three sequential proton-coupled electron transfer oxidations result in the formation of a highly oxidized intermediate, [(bpy)IrVIO(OH)(CH3COO)Cl](+). From this formal IrVI intermediate, OO bond formation takes place by a water attack on the IrVI=O moiety assisted by the acetate ligand, which abstracts a proton during the attack. The barrier was calculated to be very facile, being 14.7 kcal/mol, in good agreement with experimental kinetic results, which gave a barrier of around 18 kcal/mol. The attack leads to the formation of an IrIV-peroxide intermediate, which undergoes proton-coupled electron transfer to form an IrIIIO2 intermediate. Finally, O2 can be released, coupled with the binding of another water molecule, to regenerate the catalytic Ir-III species. Water oxidation at IrVII has a slightly higher barrier, but it may also contribute to the activity. However, water oxidation at IrV has a significantly higher barrier. Acetate oxidation by CH activation was found to have a much higher barrier, suggesting that [(bpy)Ir(H2O)(2)(CH3COO)Cl](+) is a remarkably stable catalyst. The possible catalytic species [(bpy-dc)IrIII(H2O)(3)Cl](2+) without acetate coordination has also been considered and also gave a reasonably feasible barrier for the water oxidation. OO bond formation at IrVII is slightly preferred compared with at IrVI, which is different from the case with acetate.