A quantum mechanical/molecular mechanical (QM/MM) study of the formation of the elusive active species Compound I (Cpd I) of nitric oxide synthase (NOS) from the oxyferrous intermediate shows that two protons have to be provided to produce a reaction that is reasonably exothermic and that leads to the appearance of a radical on the tetrahydrobiopterin cofactor. Molecular dynamics and energy considerations show that a possible source of proton is the water H-bond chain formed from the surface to the active site, but that a water molecule by itself cannot be the source of the proton; an H3O+ species that is propagated along the chain is more likely. The QM/MM calculations demonstrate that Cpd I and H2O are formed from the ferric-hydrogen peroxide complex in a unique heterolytic O-O cleavage mechanism. The properties of the so-formed Cpd I are compared with those of the known species of chloroperoxidase, and the geometry and spin densities are found to be compatible. The Mossbauer parameters are calculated and may serve as experimental probes in attempts to characterize NOS Cpd I.