The article presents DFT calcns. that elucidate the interaction of a redox mediator, iodide/triiodide, and an oxidized org. dye photo-sensitizer, providing electronic structure insight into all steps of the mechanism involved in dye-sensitized solar cells. Results show a two-step one-electron transfer process of the dye+ regeneration, where formation of an ionic {dye+,I-} pair is the first, followed by coordination of a second iodide ion to the {dye+,I-} affording a diiodide radical anion in {dye, I2-}. In addn., the electronic structure of a plausible charge-transfer complex, {dye+I2-}, in which D+ interacts with I2- was studied. This unusual charge-transfer complex could be responsible for an alternative pathway of the dye regeneration. Current results thus explain the highly analogous performance of the ubiquitous redox couple based on iodine for both classes of dyes. All considered, the obtained mechanism appears to be general and applicable for purely org. sensitizers, as well as perhaps to cyclometalate ruthenium dyes without an SCN group.