Heme catalases and peroxidases are ubiquitous enzymes principally responsible for eliminating hydrogen peroxide in aerobic organisms. The catalase reaction mechanism in the dual function enzyme catalase-peroxidase (KatG) found in bacteria and fungi has not been defined in stepwise detail. KatG enzymes contain a unique post-translational modification in the form of a three amino acid adduct (Met255-Tyr229-Trp107) with a specific role in the catalase reaction since mutation of any of the three residues virtually eliminates catalase but not peroxidase activity. During turnover of millimolar hydrogen peroxide at neutral pH, M. tuberculosis KatG forms an EPR silent heme species characteristic of peroxidase Compound III (oxyferrous heme), while at high pH, a low spin ferric species is found. Rapid freeze-quench EPR revealed a narrow doublet signal formed within milliseconds of mixing resting (ferric) KatG with hydrogen peroxide, at both neutral and alkaline pH. This radical persists only while the enzyme dismutates hydrogen peroxide. The mutant enzymes KatG[Tyr229Phe] and KatG[Trp107Phe], which lack the distal side adduct and lack catalase activity as well, do not form this radical. Simulation of the symmetrical narrow doublet EPR signal is consistent with a radical on a modified amino acid according to the observed hyperfine splitting. We propose based on the structural evidence from the EPR spectra that this radical may reside on the MetTyrTrp adduct and describe a mechanism for the catalase reaction involving this unique structural feature. In this mechanism, the protein based radical is involved in the formation and release of dioxygen from the oxyferrous intermediate.