This study investigated the kinetics and mechanism of chlorine dioxide (ClO2) inactivation of a Gram-negative bacteria Escherichia coli (ATCC 35218) in oxidant demand free (ODF) water in detail as a function of disinfectant concentration (0.5-5.0 mg/L), water pH (6.5-8.5), temperature variations (4-37°C) and bacterial density (105-107 cfu/mL). The effects of ClO2 on bacterial cell morphology, outer membrane permeability, cytoplasmic membrane disruption and intracellular enzymatic activity were also studied to elucidate the mechanism of action on the cells. Increasing temperature and disinfectant concentration were proportional to the rate of cell killing, but efficacy was found to be significantly subdued at 0.5 mg/L and less dependent on the bacterial density. The bactericidal efficiency was higher at alkaline pH of 8 or above as compared to neutral and slightly acidic pH of 7 and 6.5 respectively. The disinfection kinetic curves followed a biphasic pattern of rapid inactivation within the initial 2 min which were followed by a tailing even in the presence of residual biocide. The curves were adequately described by the Cavg Hom model. Transmission Electron Microscopy images of the bacteria cells exposed to lethal concentrations of ClO2 indicated very little observable morphological damage to the outer membranes of the cells. ClO2 however was found to increase the permeability of the outer and cytoplasmic membranes leading to the leakage of membrane components such as 260 nm absorbing materials and inhibiting the activity of the intracellular enzyme β-D-galactosidase. It is suggested that the disruption of the cytoplasmic membrane and subsequent efflux of intracellular components result in the inactivation of the Gram-negative bacteria.