The iron metal complexes containing cyclam-based macrocyclic ligands are active water oxidation catalysts, which can facilitate oxygen–oxygen bond formation during the water-splitting process. To understand the mechanism of the catalytic process, we explored this process by [Fe(cyclam)Cl2]Cl performing density functional theory-based first-principles calculations. We examined the energetics of the formation of the oxygen–oxygen bond through the investigation of complexes [FeV(cyclam)(O)2]+, and [FeV(cyclam)(OH)(O)]+2. The process of water nucleophilic addition by this FeV–(oxo) complexes was explored in detail. Our computational study confirms the formation of these species, which were reported earlier in experimental conditions. The transition states for various reactions of the catalytic cycle were obtained within the implicit water model. From these calculations, we find that the proton transfers to cis–oxo or hydroxide moiety require high activation energy during the formation of the oxygen–oxygen bond. Our calculations reveal that the oxygen–oxygen bond formation by the transfer of a proton to the explicit water molecule requires more activation free energy than the transfer of a proton to the cis–oxo or hydroxide of the FeV–oxo species. Overall [FeV(cyclam)(O)2]+ and [FeV(cyclam)(OH)(O)]+2 species with one explicit water molecule requires similar free energy. The Mulliken spin density data confirm the formation of the superoxide complexes. The activation free energy for the release of the oxygen molecule is lesser than that of the oxygen–oxygen bond formation. The natural bond orbital analysis for the complexes before and after the formation of the oxygen–oxygen bond formation shows that this bond formation happens through the interaction of antibonding orbital, π*(dx2−y2 –2py) of Fe=O moiety, with the σ*–orbital of the hydroxide group of the water molecule. © 2020, Springer-Verlag GmbH Germany, part of Springer Nature.