Iron hydroxyheme is an intermediate in heme degradation that binds to HO-1 in a five-coordinated fashion wherein the fifth ligand is His25. The structure and reactivity of hydroxyheme have been investigated using the B3LYP*, OPBE, and CASSCF methods with the 6-31+G* and 6-311+G** basis sets. Hydroxyheme [(Im)Fe-II(POH)] (POH is the hydroxyporphyrin) is readily oxidized to oxophlorin [(Im)Fe-III(PO)] (PO is the oxophlorin trianion) in the protein heme oxygenase. A computational study in the gas phase has shown that (6)[(Im)Fe-II(POH)] loses one electron from its a(2u) orbital in the presence of O-2 and produces [(Im)Fe-II(PO center dot)](a2u)(PO center dot is the oxophlorin dianion radical) in the sextet ground state with a ferrous keto pi-neutral radical structure and d(xy)(2)a(2u)(1)d(yz)(1)d(xz)(1)sigma(z2)*(1)dx(2-y2)(1) electronic configuration. There is a closely lying exited state accompanying this ferrous keto pi-neutral radical that has a high-spin ferric keto anion form of (6)[(Im)Fe-III(PO)](xy) with a(2u)(2)d(xy)(1)d(yz)(1)d(xz)(1)sigma(z2)*(1)d(x2-y2)(1) electronic configuration. In the protein environment with a dipole moment larger than 5.7, the ground state is reversed and (6)[(Im)Fe-III(PO)](xy) is at least 1.47 kcal/mol lower than the ferrous pi-neutral radical of (6)[(Im)Fe-II(PO center dot)](a2u). The interaction of H2O, O-2, and CO with iron oxophlorin will shift the electronic structure toward the formation of a keto pi-neutral radical resonance form in the following order: CO > O-2 > H2O.