Nb-monosubstituted Lindqvist-type polyoxometalates (POM), (Bu4N)4[(NbW5O18)2O] (1) and (Bu4N)3[Nb(O)W5O18] (2), catalyze epoxidation of alkenes with hydrogen peroxide and mimic the catalytic performance of heterogeneous Nb-silicate catalysts. Dimer 1 is more active than monomer 2, but the catalytic activity of the latter increases in the presence of acid. Kinetic and spectroscopic studies suggest a mechanism that involves generation of monomer (Bu4N)2[Nb(OH)W5O18] (3), interaction of 3 with H2O2 leading to a protonated peroxo niobium species, (Bu4N)2[HNb(O2)W5O18] (4), followed by oxygen transfer to a C=C bond in alkene. The previously unknown peroxo complex 4 has been isolated and characterized by elemental analysis; UV-vis, FT-IR, Raman, 93Nb, 17O and 183W NMR spectroscopy; cyclic voltammetry; and potentiometric titration. The physicochemical techniques support a monomeric Lindqvist structure of 4 bearing one peroxo ligand attached to Nb(V) in a η2-coordination mode. While the unprotonated peroxo complex (Bu4N)3[Nb(O2)W5O18] (5) is inert toward alkenes under stoichiometric conditions, 4 readily reacts with cyclohexene to afford epoxide and 1,2-trans-cyclohexane diol, which proves the key role of protons for heterolytic activation of H2O2 over Nb(V). The IR, Raman, UV-vis, and 17O NMR spectroscopic studies along with DFT calculations showed that the activating proton in 4 is predominantly located at a Nb-O-W bridging oxygen. However, DFT calculations revealed that the protonated peroxo species "HNb(O2)" is present in equilibrium with a hydroperoxo species "Nb(η2-OOH)," which has a lower activation barrier for the oxygen transfer to cyclohexene and is, therefore, the main epoxidizing species. The calculations indicate that protonation is crucial to generating the active species and to increasing POM electrophilicity.