Horseradish peroxidase (HRP) is an enzyme that oxidizes pollutants from wastewater. A previous report indicated that peroxidases can have an enhancement in initial enzymatic activity in an aqueous solution of 0.26 M 1-ethyl-3-methylimidazolium ethyl sulfate ([EMIm][EtSO4]) at neutral pH. However, the atomistic details remain elusive. In the enzymatic landscape of HRP, compound II (Cpd II) plays a key role and involves a histidine (H42) residue. Cpd II exists as oxoferryl (2a) or hydroxoferryl (2b(FeIV)) forms, where 2a is the predominantly observed form in experimental studies. Intriguingly, the ferric 2b(FeIII) form seen in synthetic complexes has not been observed in HRP. Here, we have investigated the structure and dynamics of HRP in pure water and aqueous [EMIm][EtSO4] (0.26 M), as well as the reaction mechanism of 2a to 2b conversion using polarizable molecular dynamics (MD) simulations and quantum mechanics/molecular mechanics (QM/MM) calculations. When HRP is solvated in aq [EMIm][EtSO4], the catalytic water displaces, and H42 directly orients over the ferryl moiety, allowing a direct proton transfer (PT) with a significant energy barrier reduction. Conversely, in neat water, the reaction of 2a to 2b follows the previously reported mechanism. We further investigated the deprotonated form of H42. Analysis of the electric fields at the active site indicates that the aq [EMIm][EtSO4] medium facilitates the reaction by providing a more favorable environment compared with the system solvated in neat water. Overall, the atomic level supports the previous experimental observations and underscores the importance of favorable electric fields in the active site to promote catalysis.