A density functional study of [VO(O-2)(2)(Im)](-) (1, Im = imidazole) is presented, calling special attention to effects of dynamics and solvation on the V-51 chemical shift. According to Car-Parrinello molecular dynamics simulations, rotation of the Im ligand can be fast in the gas phase, but is more hindered in aqueous solution. In the latter, bonding between Im and V is reinforced, and dynamic averaging of GIAO-B3LYP magnetic shieldings affords a gas-to-liquid shift of ca. -100 ppm for delta(V-51). A complete catalytic cycle has been characterized for olefin epoxidation mediated by 1, using H2O2 as oxidant. The rate-determining step is indicated to be initial oxygen atom transfer from 1 to the substrate via a spiro-like transition state. Substituent effects on this barrier are examined, and a significant decrease (by 2-6 kcal/mol) is revealed upon removal of the Im proton or upon complexation with a H-bond acceptor. Implications for the mechanism of the oxidative chemistry of vanadium-dependent haloperoxidases and requirements for prospective biomimetic analogues are discussed.