The oxidative dehydrogenation of propane and but-1-ene by V3O7+ is examined using density functional theory. The mechanisms presented share crucial elementary steps with selective oxidation of C-H bonds by different transition metal oxide systems ranging from gas phase species to active sites of enzymes. The more favorable interaction between the olefin and the positively charged vanadium oxide cluster has a significant impact on the reaction mechanisms. With but-1-ene a [2 + 2] addition of the C-H bond onto the V=O site is most favorable, whereas for propane the initial step is H abstraction by the V=O bond. Comparison is made with other gas phase species (VO2+ and V4O10) and with models for vanadium oxide supported on silica.