Oxidative dehydrogenation of ethane (ODHE) is an essential reaction in modern society to produce ethylene. The orthorhombic Mo₃VO_x catalyst (MoVO) was reported as one of the best catalysts for this reaction after a particular redox treatment to generate lattice oxygen defects. This study elucidates the location and nature of the defect sites as well as how molecular oxygen is activated toward the ODHE. The insights into the active site formation and guidelines for its design were gained through structural characterization, quantification of oxygen defects, and experimental and theoretical investigation of the reaction mechanisms. Peroxo formed at the defect sites of the bridging oxygen facing the heptagonal channel was found to drive the reaction efficiently.