Four mechanisms previously proposed for dioxygen activation catalyzed by α-keto acid dependent oxygenases (α-KAO) were studied with dispersion-corrected DFT methods employing B3LYP and TPSSh functionals in combination with triple-ζ basis set (cc-pVTZ). The aim of this study was to revisit mechanisms suggested in the past decade and resolve remaining issues related to dioxygen activation. Mechanism A, which runs on the quintet potential energy surface (PES) and includes formation of an Fe(III)-superoxide radical anion complex, subsequent oxidative decarboxylation, and O-O bond cleavage, was found to be most likely. However, mechanism B taking place on the septet PES involves a rate limiting barrier comparable to the one found for mechanism A, and thus it cannot be excluded, though two other mechanisms (C and D) were ruled out. Mechanism C is a minor variation of mechanism A, whereas mechanism D proceeds through formation of a triplet Fe(IV)-alkyl peroxo bridged intermediate. The study covered also full optimization of relevant minimum energy crossing points (MECPs). The relative energy of critical intermediates was also studied with the CCSD(T) method in order to benchmark TPSSh and B3LYP functionals with respect to their credibility in predicting relative energies of septet and triplet spin states of the ternary enzyme-Fe-α-keto glutarate (α-KG)-O2 complex.