Three pathways for the reaction of bispidine-iron(II) complexes (where bispidine is a rigid tetradentate amine/pyridine ligand) with H2O2 have been studied by DFT calculations. For all oxidation states the high-spin and low-spin (intermediate-spin) forms have been optimized, and the computed data have been compared with the readily available experimental results. It is concluded that there is a direct conversion of the bispidine-iron(II)-hydrogen peroxide complex to the corresponding iron(IV)-dihydroxo compound, which is a novel possible oxidant for the dihydroxylation of olefins.