Calculations based on Density Functional Theory (DFT) have been carried out on the activation of the C-H and O-H bonds in methanol by Cl2CrO2 (1a). Two modes of activation were considered. The first was the abstraction of hydrogen by Cl2CrO2 represented by the reactions (i): CH3OH + 1a Æ Cl2(O)Cr-OH (1b) + OCH3 and (ii): CH3OH + 1a Æ Cl2(O)Cr-OH (1b) + CH2OH. The two reactions were found to be endothermic by 41 kcal/mol (i) and 29 kcal/mol (ii), respectively. The second mode involves addition of the O-H and C-H s-bonds to a Cr-O multiple bond of 1a leading to (iii): Cl2(O)(OH)Cr-OCH3 (1e) and (iv): Cl2(O)(OH)Cr-CH2OH (1f). The calculated endothermicities were 14 kcal/mol for (iii) and 23 kcal/mol for (iv). It is concluded that (ii) and ( iv) are feasible pathways for C-H activation whereas only (iii) is available for O-H activation. The activation processes (i-iv) constitute possible first steps in the oxidation of methanol by 1a. Other possible steps of importance for the oxidation were investigated. They include the decomposition of the addition products (v): 1e Æ CrCl2(OH)2 + H2CO - 9 kcal/mol and (vi): 1f Æ CrCl2(OH)2 + H2CO -18 kcal/mol as well as the capture of the radicals produced in the abstraction reactions (vii): OCH3+ 1a Æ Cl2O2Cr-OCH3 (1c) - 9 kcal/mol and (viii): CH2OH + 1a Æ Cl2(O)CrO-CH2OH (1c) - 36 kcal/mol. Fully optimized structures are provided for 1a to 1f. It is concluded that oxidation of methanol by CrCl2O2 (ix): CrCl2O2 + CH3OH Æ CrCl2(OH)2 + H2CO is endothermic by 5 kcal/mol and most likely proceeds by addition of the O-H bond (iii) followed by decomposition to CH2O (v). The strength of the Cl2(O)CrO-H bond is crucial for the C-H and O-H activation by 1a. The Cl2(O)CrO-H bond energy has been compared to the O-H bond strengths in other hydroxy metal complexes. The following values were obtained : D(O2CrO-H) = 81 kcal/mol; D( Cl2(O)CrO-H) = 70 kcal/mol; D(O2OHCrO--H ) = 56 kcal/mol ; D(O3MnO--H ) = 63 kcal/mol and D(O3RuO-H ) = 64 kcal/mol .