Photosynthetic oxidation of water to dioxygen is catalyzed by the Mn4CaO5 cluster in the protein-cofactor complex photosystem II. The light-driven catalytic cycle consists of four observable intermediates (S0, S1, S2, and S3) and one transient S4 state. Recently, using X-ray free-electron laser crystallography, two experimental groups independently observed incorporation of one additional oxygen into the cluster during the S2 to S3 transition, which is likely to represent a substrate. The present study implicates two competing reaction routes encountered during the structural rearrangement of the catalyst induced by the water binding and immediately preceding the formation of final stable forms in the S3 state. This mutually exclusive competition involves concerted versus stepwise conformational changes between two isomers, called open and closed cubane structures, which have different consequences on the immediate product in the S3 state. The concerted pathway involves a one-step conversion between two isomeric hydroxo forms without changes to the metal oxidation and total spin (Stotal = 3) states. Alternatively, in the stepwise process, the bound waters are oxidized and transformed into an oxyl–oxo form in a higher spin (Stotal = 6) state. Here, density functional calculations are used to characterize all relevant intermediates and transition structures and demonstrate that the stepwise pathway to the substrate activation is substantially favored over the concerted one, as evidenced by comparison of the activation barriers (11.1 and 20.9 kcal mol−1, respectively). Only after formation of the oxyl–oxo precursor can the hydroxo species be generated; this occurs with a slow kinetics and an activation barrier of 17.8 kcal mol−1. The overall thermodynamic driving force is likely to be controlled by the movements of two glutamate ligands, D1-Glu189 and CP43-Glu354, in the active site and ranges from very weak (+0.4 kcal mol−1) to very strong (–23.5 kcal mol−1).