B3LYP density functional theory calculations are used to unravel the mysterious third step of aromatase catalysis. The feasibility of mechanisms in which the reduced ferrous dioxygen intermediate mediates androgen aromatization is explored and determined to be unlikely. However, proton-assisted homolysis of the peroxo hemiacetal intermediate to produce P450 compound I and the C19 gem-diol likely proceeds with a low energetic barrier. Mechanisms for the aromatization and deformylation sequence which are initiated by 1 beta-hydrogen atom abstraction by P450 compound I are considered. 1 beta-Hydrogen atom abstraction from substrates in the presence of the 2,3-enol encounters strikingly low barriers (5.3-7.8 kcal/mol), whereas barriers for this same process rise to 17.0-27.1 kcal/mol in the keto tautomer. Transition states for 1 beta-hydrogen atom abstraction from enolized substrates in the presence of the 19-gem-diol decayed directly to the experimentally observed products. If the C19 aldehyde remains unhydrated, aromatization occurs with concomitant decarbonylation and therefore does not support dehydration of the C19 aldehyde prior to the final catalytic step. On the doublet surface, the transition state connects to a potentially labile 1(10) dehydrogenated product, which may undergo rapid aromatization, as well as formic acid. Ab initio molecular dynamics confirmed that the 1 beta-hydrogen atom abstraction and deformylation or decarbonylation occur in a nonsynchronous, coordinated manner. These calculations support a dehydrogenase behavior of aromatase in the final catalytic step, which can be summarized by 1 beta-hydrogen atom abstraction followed by gem-diol deprotonation.