The origin of the inversion stereoselectivity of housane formation via photochemical nitrogen extrusion of diazabicycloheptene (DBH) has been investigated using reaction path computations and multireference second-order perturbation theory within a CASPT2//CASSCF scheme. We show that the primary photoproduct of the reaction is an exo-axial conformer of the diazenyl diradical ((1)DZ) which displays a cyclopenta-1,3-diyl moiety with a Cs-like structure. 1DZ is selectively generated via decay at a linear axial conical intersection, and it is located in a shallow region of the ground state potential energy surface that provides access to five different reaction pathways. Reaction path analysis (including probing with classical trajectories) indicates that production of inverted housane can only occur via impulsive population of an axial-to-equatorial pathway, and it is thus inconsistent with thermal equilibration of the primary 1DZ conformer. Similarly, according to the same analysis, the decrease of inversion stereoselectivity and even the retention (stereochemical memory effect) observed for suitably substituted DBHs are explained by dynamics effects where the axial-to-equatorial impulsive motion is restrained by the inertia and/or steric hindrance of the substituents. These results shade light on the poorly understood mechanisms that allow a photochemical reaction, in which a large amount of energy is deposited in the reactant by photon absorption, to show a high degree of stereoselectivity.