In this work, the TPSSh density functional has been benchmarked against a test set of experimental structures and bond energies for 80 transition-metal-containing diatomics. It is found that the TPSSh functional gives structures of the same quality as other commonly used hybrid and nonhybrid functionals such as B3LYP and BP86. TPSSh gives a slope of 0.99 upon linear fitting to experimental bond energies, whereas B3LYP and BP86, representing 20% and 0% exact exchange, respectively, give linear fits with slopes of 0.91 and 1.07. Thus, TPSSh eliminates the large systematic component of the error in other functionals, reducing rms errors from 46-57 to 34 kJ/mol. The nonhybrid version of the functional, TPSS, gives a slope of 1.08, similar to BP86, implying that using 10% exact exchange is the main reason for the success of TPSSh. Typical bioinorganic reactions were then investigated, including spin inversion and electron affinity in iron-sulfur clusters, and breaking or formation of bonds in iron proteins and cobalamins. The results show that differences in reaction energies due to exact exchange can be much larger than the usually cited similar to 20 kJ/mol, sometimes exceeding 100 kJ/mol. The TPSSh functional provides energies approximately halfway between nonhybrids BP86 and TPSS, and 20% exact exchange hybrid B3LYP: Thus, a linear correlation between the amount of exact exchange and the numeric value of the reaction energy is observed in all these cases. For these reasons, TPSSh stands out as a most promising density functional for use and further development within the field of bioinorganic chemistry.