Heme b containing chlorite dismutase (Cld) catalyses the conversion of chlorite to chloride and dioxygen which includes an unusual OO bond formation. This review summarizes our knowledge about the interaction of chlorite with heme enzymes and introduces the biological role, phylogeny and structure of functional chlorite dismutases with differences in overall structure and subunit architecture. The paper sums up the available experimental and computational studies on chlorite degradation by water soluble porphyrin complexes as well as a model based on the active site of Cld. Finally, it reports the available biochemical and biophysical data of Clds from different organisms which allow the presentation of a general reaction mechanism. It includes binding of chlorite to ferric Cld followed by subsequent heterolytic OCl bond cleavage leading to the formation of Compound I and hypochlorite, which finally recombine for production of chloride and O2. The role of the Cld-typical distal arginine in catalysis is discussed together with the pH dependence of the reaction and the role of transiently produced hypochlorite in irreversible inactivation of the enzyme.