In the presence of nitrous oxide, Fe-ZSM-5 is known to catalyze the partial oxidation of benzene to phenol with high selectivity. The active site for this reaction is thought to be a surface iron-oxo species generated upon dissociation of nitrous oxide and release of nitrogen. In this study, density functional theory calculations were used to explore possible pathways for benzene oxidation at an isolated Fe center in ZSM-5. Z(-)[FeO2](+) and Z(-)[FeO](+) were considered as candidate active centers. The most favorable pathway involves the direct oxidation of benzene via the reaction Z(-)[FeO2](+)(C6H6) --> Z(-)[FeO](+)(C6H5OH). Consistent with experimental observations, we predict that the kinetic isotope effect for the oxidation of 1,3,5-d(3)-benzene is near unity at 298 K. An overall mechanism for N2O oxidation of benzene to phenol is proposed on the basis of an analysis of relative rates of N2O decomposition and benzene oxidation. In the case of the isolated active center Z(-)[FeO2](+), the system shows a clear preference for benzene oxidation, whereas nitrous oxide dissociation is favored over Z(-)[FeO](+). This mechanism is then used to derive an expression for the overall rate of benzene oxidation. The apparent activation energy deduced from this rate expression ranges from 37 to 27 kcal/mol over the temperature range 600 to 800 K. At 673 K, the predicted turnover frequency compares well with that measured experimentally. (C) 2003 Elsevier Inc. All rights reserved.