Sb^VF₅ is generally assumed to oxidize methane through a methanium-to-methyl cation mechanism. However, experimentally no H₂ is observed, and the mechanism of methane oxidation has remained unsolved for several decades. To solve this problem, density functional theory calculations with multiple chemical models (mononuclear and dinuclear) were used to examine methane oxidation by Sb^VF₅ in the presence of CO leading to the methyl acylium cation ([CH₃CO]⁺). While there is a low barrier for methane protonation by [Sb^VF₆]⁻[H]⁺ (the combination of Sb^VF₅ and HF) to give the [Sb^VF₅]⁻[CH₅]⁺ ion pair, H₂ dissociation is a relatively high energy process, even with CO assistance, and so this protonation pathway is reversible. While Sb-mediated hydride transfer has a reasonable barrier, the C–H activation/σ-bond metathesis mechanism with the formation of an Sb^V–Me intermediate is lower in energy. This pathway leads to the acylium cation by functionalization of the Sb^V–Me intermediate with CO and is consistent with no observation of H₂. Because this C–H activation/metal-alkyl functionalization pathway is higher in energy than methane protonation, it is also consistent with the experimentally observed methane hydrogen-to-deuterium exchange. This is the first time that evidence is presented demonstrating that Sb^VF₅ acts beyond a Bronsted superacid and involves C–H activation with an organometallic intermediate. In contrast to methane, due to the much lower carbocation hydride affinity, isobutane significantly favors hydride transfer to give the tert-butyl carbocation with concomitant Sb^V to Sb^III reduction. In this mechanism, the resulting highly acidic Sb^V–H intermediate provides a route to H₂ through protonation of isobutane, which is consistent with experiments and resolves the longstanding enigma of different experimental results for methane versus isobutane.