The effect of axial ligands on the reactivity of high-valent iron(IV) oxo-porphyrins (Compound I) was investigated using the B3LYP hybrid density functional method. We studied alkane hydroxylation using four models: Compound I with thiolate, imidazole, phenolate, and chloride anions as axial ligands. The first three ligands were employed as models for cysteinate, histidine, and tyrosinate, respectively. Our calculations show that anionic ligands and neutral ligands favor different electronic states for stationary points in the reaction coordinate, and the calculated energy barrier and energy of several reaction intermediates show similar values. A remarkable effect of axial ligands was found in the final product release step. Our calculations show that the thiolate ligand weakens a bond between heme and an alcohol. In contrast, the imidazole ligand significantly increases the interaction between heme and an alcohol, which causes the catalytic cycle to be less efficient.