Gradient-corrected density functional calculations have been performed on a model for the reductive half-reaction of the molybdenum center of xanthine oxidase related enzymes, enabling a discussion of structural details of the Mo coordination sphere in various species involved in the reaction. On the basis of a calculated stable intermediate, we suggest that the substrate is bound to the molybdenum site before rather than after its oxidation. The activation barrier for hydride transfer from the model substrate formaldehyde to the Mo site is calculated to be 7.7 kcal/mol. Since this reaction is predicted to be thermoneutral, the hydride transfer may occur in either direction. The complex formed by the oxidized substrate and the active site is rather weakly bound, supporting the postulated facile replacement of the product from the Mo site by a water molecule.