The aromatic hydroxylation of pseudocumene (PC) with aqueous hydrogen peroxide catalyzed by the divanadium-substituted γ-Keggin polyoxotungstate TBA4[γ-PW10O38V2(μ-O)(μ-OH)] (TBA-1H, TBA = tetrabutylammonium) has been studied using kinetic modeling and DFT calculations. This reaction features high chemoselectivity and unusual regioselectivity, affording 2,4,5-trimethylphenol (TMP) as the main product. Then the computational study was extended to the analysis of the regioselectivity for other alkoxy- and alkylarene substrates. The protonation/deprotonation of TBA-1H in MeCN/tBuOH (1:1) was investigated by 31P NMR spectroscopy. Forms with different protonation states, [γ-PV2W10O40]5- (1), [γ-HPV2W10O40]4- (1H), and [γ-H2PV2W10O40]3- (1H2), have been identified, and the protonation equilibrium constants were estimated on the basis of the 31P NMR data. DFT calculations were used to investigate the oxygen transfer process from hydroperoxo species, [γ-PW10O38V2(μ-O)(μ-OOH)]4- (2) and [γ-PW10O38V2(μ-OH)(μ-OOH)]3- (2H), and peroxo complex [γ-PW10O38V2(μ-2:2-O2)]3- (3) toward the different positions in the aromatic ring of PC, anisole, and toluene substrates. Product, kinetic, and computational studies on the PC hydroxylation strongly support a mechanism of electrophilic oxygen atom transfer from peroxo complex 3 to the aromatic ring of PC. The kinetic modeling revealed that the contribution of 3 into the initial reaction rate is, on average, about 70%, but it may depend on the reaction conditions. DFT calculations showed that the steric hindrance exerted by peroxo complex 3 is responsible for the origin of the unusual regioselectivity observed in PC hydroxylation, while for anisole and toluene the regioselective para-hydroxylation is due to electronic preference during the oxygen transfer from the active peroxo species 3.