We present a pentadentate bispidine iron complex with a guanidine pendant group at one of the pyridine donors (bispidine = 3,7-diazabicyclo[3.3.1]nonane), whose iron(II) precursor can be oxidized with iodosylbenzene in strictly water- and oxygen-free solution to an iron(III) species that is a competent catalyst for oxygen atom transfer (OAT) to thioanisole. Time-dependent UV–vis–NIR spectroscopy and ESI and tandem mass spectrometry, supported by EPR and Mössbauer spectroscopy and the investigation of the OAT activity, lead to the conclusion that the active species is an iron(III)-peroxido complex and that its formation is initiated by an intramolecular C–H abstraction (HAA) at the guanidinyl substituent, followed by OH rebound to produce an iron(II) intermediate with a hydroxylated guanidinyl substituent. This is reoxidized to the corresponding iron(IV)-oxido intermediate, where the FeIV=O and ligand–OH groups are well preorganized for an intramolecular O–O bond formation. An outer-sphere oxidation then produces the iron(III)-peroxido complex, which relatively efficiently sulfoxidizes thioanisole. A detailed DFT-based computational study supports the experimental observations and indicates that the initial HAA is rate determining; that is, O–O bond formation is a very efficient process. The effectiveness of the initial HAA, that of the OH rebound and specifically that of the O–O bond formation, are shown to be due to the well preorganized coordination sphere of the iron-bispidine active species.