The reaction mechanism of a model compound of ebselen, 2, [1,2-benzisoselenazol-3(2H)-one], with peroxynitrous acid (HOONO) has been investigated using the density functional (B3LYP), coupled-cluster (CCSD(T)), and polarizable continuum model (PCM) methods, in conjunction with the 6-31G(d), 6-311G(d,p), 6-311+G(d,p), and 6-311+G(3df,2p) basis sets. It was shown that the B3LYP method is not reliable for studying the energetics and stability of the weakly bound '(OHONO)-O-...' structure and may lead to the wrong conclusions. The CCSD(T) calculations with the 6-311+G(d,p) and 6-311+G(3df,2p) basis sets show that the disputed '(OHONO)-O-...' structure is unlikely to exist in the gas phase. Including explicit solvent (water) molecules in the calculations resulted in a complete cleavage of the weak interaction between the 'OH and ONO' radicals in '(OHONO)-O-...'. The reaction of 2 + HOONO --> 2-O + HONO was found to be exothermic in the gas phase by 25.3 (24.9) kcal/mol and may proceed via two different pathways: stepwise and concerted. The concerted mechanism, which proceeds via the O-O bond cleavage transition state, was found to be more favorable at the enthalpy level. However, including an entropy correction makes the stepwise mechanism more favorable, which proceeds through the O-O bond homolysis in cis-HOONO. Even in solution, the reaction of compound 2 (and ebselen) with HOONO prefers to proceed via the concerted mechanism. A comparison of the reaction mechanisms of 2 with HOONO and ONOO- (as reported previously (J. Am. Chem. Soc., in press)(22)) shows that the reaction of 2 (and ebselen) with HOONO should be slower than that with ONOO- in both the gas phase and in solution. We have shown that the observed (FEBS Lett. - 1996, 398, 179)(20) lower yield of selenoxide at high pH values is partially due to the large O-O bond cleavage barrier for HOONO versus ONOO-. Our analysis shows that reaction of 2 with ONOO- is a two-electron oxidation process and occurs via heterolytic O-O bond cleavage, whereas the reaction of 2 with HOONO is a one-electron oxidation process and occurs via homolytic O-O bond cleavage.