A detailed density functional study was performed to examine the reaction of mixed-valence dirhodium and diiridium species [M-2(0,11)(tfepma)(2)((CNBu)-Bu-t)(2)(Cl)(2) (1, tfepma = MeN[P(OCH2CF3)(2)](2) (CNBu)-Bu-t = tert-butyl isocyaninde)] with HCl and oxygen with an interest in examining the pathways for oxygen insertion into the intermediate metal hydride to form hydroperoxo species. The O-2 hydrogen atom abstraction mechanism for both the Rh and Ir was found to be feasible. This is the first time this mechanism has been applied to a Rh system and only the second time it has been examined for a system other than Pd. The competing trans HCl reductive elimination pathway was also examined and found to be greatly dependent on the stereochemistry of the starting hydride primarily due to the intermediate formed upon the loss of Cl-. As a result, the reductive elimination pathway was more favorable by 11.5 kcal/mol for the experimentally observed Ir stereoisomer, while the two pathways were isoenergetic for the other stereoisomer of the Rh complex. All findings are consistent with the kinetics study previously performed.