The phosphido complex RuCp*(PPh2CH=CHPPh2)(PPh2) (1) was exposed to a number of small molecules and was found to recognize and activate molecular oxygen in an unprecedented fashion: the ruthenium species split O2 in a ligand-based 4-electron reduction to produce an endo epoxide, as well as a phosphinito ligand. Based on XRD data, VT NMR studies, cyclooctene trapping studies, and crossover experiments it was determined that the reaction proceeded through an intramolecular mechanism in which initial oxidation of the phosphido ligand generated an end-on peroxo intermediate. This mechanism was also supported by computational studies and electrochemical experiments. In contrast, an analogue of 1, RuCp*(Ph2P(ortho-C6H4)PPh2)(PPh2) (3), reacted in an intermolecular fashion to generate two phosphinito ligands.