Previously reported experimental results indicate that photooxygenation of homochiral N-(hydroxyalkyl)-2-methylpyrroles with singlet oxygen yields transrather than cis-bicyclic lactams as the major product. In this study, the origin of selectivity in this reaction has been investigated with computational methods. Relative stabilities of homochiral N-(hydroxyalkyl)-2-methylpyrrole conformers and their effect on pi-facial selectivity of O-1(2) were extensively studied. Stepwise and concerted reaction mechanisms, starting from the endoperoxide intermediates, were proposed and modeled in vacuum using the UB3LYP method with the 6-31+G** basis set. Solvent calculations were carried out in CH2Cl2, by means of the integral equation formalism-polarizable continuum model (IEF-PCM) at the UB3LYP/6-31+G** level of theory. Free energies of activation leading to both diastereomers were analyzed in an effort to explain the stereoselectivity and product distribution. Steric interactions among the pyrrole substituents were shown to lead to a rotational barrier higher than 10 kcal/mol. Hence, hindered internal rotation is suggested to cause one pyrrole conformer to be substantially overpopulated. This in turn has a major effect on pi-facial selectivity of O-1(2), thereby favoring one endoperoxide over the other and leading to the diastereoselective synthesis of trans-pyrrolooxazolones. The importance of hindered internal rotors, for an accurate calculation of the frequency factors of a chemical reaction, has already been mentioned in the literature many times; however, in this work hindered internal rotors also seem to dictate the diastereoselective outcome of the reaction.