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The mechanism begins with a concerted [3+2] cycloaddition between the alkene and the permanganate ion (MnO₄^-), generating a five-membered cyclic manganate(V) diester. A hydroxide ion then attacks the manganese center, breaking one of the Mn-O bonds and opening the ring. After a prototropy step, a second hydroxide ion attacks the manganese center in the same way, releasing a monodeprotonated diol with a manganese(V) species, the hypomanganate ion MnO₄^3-. A further proton transfer converts the monodeprotonated diol into the neutral product, while MnO₄^3- rapidly disproportionates, ultimately giving MnO₂ as a by-product.

Stereochemistry: Dihydroxylation of an alkene with diluted KMnO₄ is a syn addition: the relative configuration of the alkene substituents is preserved in the product. A (Z) alkene leads to a cis diol and the (E) configuration gives the trans product.